EWEB Board of Commissioners — July 6, 2021

0:04 to order and we have a jam-packed agenda tonight and it's going to be a pretty long meeting so let's dive right in with item number one and agenda i guess i have one question for the board um our meeting is slated to go pretty late tonight and there's one thing item number 10 which is the update on the state legislative session it's 20 minutes we can keep that or we can move it to next month's meeting if we want to shave 20 minutes off this this meeting i don't know how much it matters but john i suppose leaving it in and then if it is time if jason doesn't if it's okay we can just push it back to the next meeting if it did depending on how this goes because

0:50 we've got a lot of people signed up but some people don't show up or they testify quicker and we go through i faster still leave it there if we kick it out now we're gone forever okay great uh anything else any other agenda check your house yeah sonia i can barely hear you through the computer i don't know if others are having the same issues or not but um me specifically or everybody everybody i don't know if that's well maybe that's just me i don't know what's going on okay i'll try to fix it i might

1:35 all right okay um moving on to item number two items from board members and general manager just raise your hand if you want to go first or i can just call on people i'm not seeing anybody raise their hands so does anybody have any items they would like to yes john brown yeah i'd just like to thank eweb and the cooperation they've been giving about the growing department of fish and wildlife and the salmon sorting function up at liberty and i've been volunteering up there for a little bit and although it's very boring and there's sudden moments of excitement when the fish fly up there i really appreciate the cooperation that we've been giving by changing the flow of what we did and things that get those native salmon up over that uh and separate them from the hatchery fish thank you very much

2:23 great um just a quick update i did have an opportunity to testify during the public forum at the city council on the 28th uh just give them an update on our 40th avenue water storage facility staff helped me out very much with that some data points to help them with and it's hard to squeeze into two and a half minutes so you people who are testifying tonight i i empathize with you thanks any other questioners okay i would just um jump in and say i know the project team for 40th avenue has been fielding a lot of um inquiries and i appreciate all the effort that they're putting in to make sure people are getting timely responses and i know

3:12 others are working on that as well anyway the team feeling crazy great no updates from me all right and none for me okay so we're going to move on to the public inputs via telephone right now when your name is called remember to unmute your call press star 6 if you're calling from a landline so simply use the unmute button if you're calling from your cell phone please state your name and optionally your address or ward and speak clearly into the phone each speaker will be offered three minutes to

3:57 present their testimony please keep track of time and we will notify you when your time is almost up and then when three minutes has elapsed so there's a lot of people who are signed up to speak tonight so we're gonna stick with that three minute timeline so um we will give you a 15-second warning and then at three minutes your testimony will end after all testimony is heard each commissioner will have an opportunity to speak if they choose although by policy we do not engage in a back and forth dialogue please note that failure of a commissioner to speak shall not be construed as support of or opposition to any speaker's testimony if a question is presented by a speaker and the board does not provide an answer an eweb staff member will contact

4:42 the speaker so that the question can be addressed at a later time so the public testimony period for this meeting is now open and the first three speakers that we have um we're going to start with steven anderson next we have sandra bishop followed by catherine baker yes um i'm i'm in the area of the 40th and patterson water project somebody needs to mute their phone because there's some rough one going on it makes it hard to hear i would like to begin by reading eweb's mission statement which is

5:28 we believe it is important that we are active participants in our communities and protecting the environment is not only at the core of our mission as it relates to delivering clean drinking water and renewable party power it's also at the heart of what we value for us caring about our community and protecting the environment go hand in hand unquote to which i would add except for the water project at 40th and patterson so here we sit in south eugene and formed a year ago last march ewef would build one tank let me repeat one tank that's always been your plan we had a simple request build the one tank on site two and save the big globe of heritage trees as long as possible sounds pretty simple they are important

6:13 for carbon sequestration habitat cooling the neighborhood and keeping wind storms from affecting all the trees below the hilltop to the east and in fact we stated we would support your plan wholeheartedly but for that one sticking point and all along the way instead of working with us he has changed the justifications for not reversing the site plan all of which are easily refuted if you allow other experts to weigh in and not just staff in fact one of your own contractors informed us that moving tank 1 to site two would not preclude blasting for another tank in a decade or so in the future as was your original plan but that is not what eweb is telling

6:58 everyone now this is just one example of a flimsy justification for your change so now you have outraged citizens ready to hold someone accountable for this coming debacle for south eugene three and a half years of heavy construction minimum instead of two we did not ask for this situation we would normally expect our commissioners to listen to our concerns and hold actual meetings obviously we have not had public meetings during coven but there is no reason now not to hold a public meeting and give your constituents a chance to weigh in on your change of plans eweb had a plan years in the making and it's been thrown out the window one tank at 40th and patterson rebuild college hill

7:43 rebuild hawkins heights and then return to 40th and patterson around the year 2030. right now it appears you believe that the community doesn't know what the truth is and what's in store that's just fine we in south eugene will suffer until 2025 if you do not change direction do not do this to your community we've never felt so mistreated by a public entity please stop if you'll consider change and commissioners walk this land with us and hear the other side of the story you've only heard once thank you very much uh next up we have sandra bishop followed by

8:28 catherine baker followed by susan barnhart i think adam spencer's going to be reading her testimony so sandra you're up all right and we'll circle back to sandra and uh catherine baker you are

9:21 i don't know if people are forgetting to unmute their call you need to press star six if you're calling from a landline or remember to press the unmute button on your phone all right we'll keep going down the list and see what's happening here susan barnhart adam spencer is going to read that president salsberg i don't see adam on the call are you there adam if not i can go ahead and read susan barnhart ward 7 whitaker neighborhood subject is beautiful land at 40th and patterson

10:06 comments i have already emailed the commissioners twice on this issue and would like this to be part of the public record i am opposed to the plan to destroy the beautiful forest at 40th and patterson i agree it is important to have safe earthquake-proof reservoirs but they need to be built on land that does not have a forest on it we need our forest to sequester carbon due to the climate crisis to protect species of animals and plants and as a place for humans to take refuge if those big old beautiful trees are cut down many other trees in that neighborhood will be lost in the next wind storm you need to hear more public more from the public before a decision like this and explore all alternatives perhaps a land swap is

10:53 possible or just building one reservoir there on the western part of the land please consider your decision all right thank you senator bishop are you there all right we'll keep going down the list next up we have uh marilyn block followed by jerome joanne corrabio followed by haley scott and i apologize if i mispronounce anybody's name but marilyn you are a okay i'm marilyn block and i live at 39 30 hilliard i'm in uh

11:38 matt keating's ward whatever that is um i was uh glad to hear get a phone call from laura farthing engineer on this project um and she said that as of march you were only going to build one tank and then got some input from some neighbors and in april you decided to build two tanks

12:23 and so that it's fairly recent that this change has happened and it seems reasonable and fair to involve more public input in this decision and so i request a public meeting regarding this change in the plan before anything else happens that's it thank you very much next up we have joan caravio i hope i'm pronouncing your name correctly followed by haley k scott

13:11 hi yes my name is joanne caravio i live in ward 3 and i just learned about this plan on june 3rd while i'm not opposed to a reservoir plan i'm strongly opposed to cutting the trees down that are existing there and not including them as infrastructure which they are their infrastructure like roads and sewers and everything else they they they absorb radiation from the sun they filter out pollution they suck up storm water they store carbon they spread moisture for their bees they nurture wildlife and they improve people's mental and physical health and scientists say they can lower urban temperatures up

13:56 10 degrees it's getting hotter out there and trees need to be seen as something that will help eweb it will help eugene it will help that neighborhood it will help the planet there must be a way to have a reservoir and keep those trees they are functional they've been quietly doing this job for years please don't consider them unimportant we need to have more public input before the decision to build two reservoirs in this site is done that's all i'm asking thank you for listening to me

14:42 thank you next up we have hayley k scott followed by martha dickey followed by stephen goldman president salzburg i haven't seen haley join the meeting um nor martha dickey okay then stephen goldman you are up followed by gennady hartman followed by joseph hubble okay i'm here um thank you for allowing me to speak today my name is stephen goldman i live at 1495 west hilliard lane in the river neighborhood

15:32 i just learned about this project a couple weeks ago from friends from 1985 to 2007 i was the natural resources program manager for the california cow conservancy which is a state of california agency charged with saving lake tahoe from environmental destruction i served that board appointed by the governor and other officials for 22 years first i have to say that when i read the record of decision for the patterson hill water tank projects i was greatly disturbed by the quality of your public process which i believe is inadequate in several respects i hope i have time to explain that in this brief comment period um before i get into the details of my

16:17 comments i want to first urge the board to hold an in-person public hearing to allow everyone in this community who is interested concerned or has questions about this project to be heard and to have all the questions and concerns responded to thoroughly openly and honestly this has not happened shortly after i moved to eugene in 2008 i became aware of how vulnerable our water system is because it relies on a single intake point on the mackenzie river i'm sure you're well aware of how close the holiday farm fire came to e-web filtration facility there last september i acknowledge that there is a need for additional reservoir storage in eugene on and replacement of college hill and hawkins hill which are leaking an earthquake unsafe

17:04 however since building two new uh 7.5 million gallon tanks on on the patterson hill will only provide one additional day of water water supply for our community at its present rate of consumption um i believe that developing backup sources of water in case of an emergency is at least as critical a need and probably a more critical need than building water tanks i i learned from your staff which has been helpful by the way that building a filtration plant on the willamette river is in consideration but apparently it is not a fast track project with a completion date i think that project needs to be fast

17:50 tracked i also learned from your staff that that you have developed five wells recently that are intended to serve the community in the event of a disruption of our water supply but the community does not know where these wells are and what happens if we have an earthquake that shuts off our power breaks the water lines and shuts out power to the internet and and our phones and so forth how are people going to know where to go to get this emergency water no one i talked to has any idea that these exist um thank your time is up okay i have many more comments i'll email them to you thank you next up we have

18:36 i'm sorry if i first pronounce your name janae hartman followed by joseph hubble followed by ralph mcdonald all right um i'm jenna and i am 12 about to turn 12 on the 16th um i feel like i should start off by saying that i think that that is super unfair to everyone that by putting two water tanks in this beautiful forest that is one of the only ones closest in the town that has neighborhoods surrounded by it um that is super unfair to

19:24 destroy and cut down all those trees with all the animal homes in them the trees are super old and these animals need those especially when they're in town because once we cut down those trees they don't have any homes um every year it keeps getting hotter and humble uh which means more trees are burning down so at some point every tree is going to count so i feel like we need these trees

20:11 especially since it is the only one one of the only ones in town and i think that it that it is very unfair that this was not put out to be in the public and this was a decision made technically privately and since i heard this sometime last month i was very disappointed um i feel like it might be a little fair to put one water tank and not cut down most of the forest but putting two water chains is very unfair at some point i want to be able to go there with my children

20:56 in the future i want them to be able to go there with their children your teachers thank you very much um next up we have joseph hubble followed by ralph mcdonald followed by william o'brien hello uh ladies and gentlemen um my name is joseph hubbell i live a half a block away from tugman park just down the street from the project and uh until this last sunday i had not heard of this now granted i'm

21:41 not as well connected as some to local matters but you would think that being this close i'm a bit of a stakeholder here and that somehow eweb would have found a way to inform me give me a chance to uh to have some input here i believe government should be more inclusive rather than exclusive and the job that's been done so far is woefully poor um now back to the project itself i'm not going to say whether it's good or bad because i really don't know enough yet i have not had a major chance to become informed

22:27 uh luckily i have some activist friends who uh who are getting me informed um you know i i have uh questions right off the bat of uh okay so college hill is is uh in need of major rep it's beyond repair it it needs to be torn down can we build another one there um i think that that everybody that's spoken so far about the need for the this urban forest has been um spot on the need for more of that is apparent in what's going on around the world uh and uh for us to not

23:14 let me get to the point i think that that we need to use more of our the collective minds of all the people here to come up with plans that are more outside of the box than just building a huge tower up there full of water there must be alternatives that we can consider i don't think that's the only idea that we can come up with and so i would like you to consider that you know there's a beautiful piece of land up there and there's a bit of a clearing up there why don't we have a meeting up there where it's at and uh and all the people who are concerned can come up and meet with our board members

23:59 and talk more face to face anyway that's the end of me thank you very much thank you thank you ralph mcdonald followed by william o'brien followed by victor odoback president schlossberg i have not seen ralph mcdonald nor william o'brien joined the meeting as of yet okay so victor odlebach is up next followed by jonathan pincus followed by mark rabinowitz all right i i'm on a landline this is

24:46 victor oblavac i hope everybody can hear me do i need to push star six again no we can hear you and and more than you just oh everybody can hear me okay great well thank you president schlossberg for having this meeting i want to quote jason simon on next door he said from an engineering standpoint college hill is actually a much better site to expand the water supply for the entire city of eugene it is much higher it already has the old growth trees removed there is enough room up there to put more water capacity

25:31 than the 40th and patterson site the three existing reservoirs up there could be upgraded each in sequence with a minimal disruption to services we do know how to build reservoirs we redid skinner's butte reservoir from 300 000 to 3 million gallons in 1926 95 years ago this is how we need to build so what i propose is he webb says it's a publicly owned utility owned by us yet we have never

26:18 had the opportunity to vote directly on anything in the entire history of eweb we need to put a statement in the next bill real simple do you support redoing the three college hill water tanks in phases to make them earthquake proof and provide water for eugene for the next hundred years you vote yes or no second question do you support stopping any cutting of trees on the 40th street and patterson street this includes halting all work on any water towers there you answer yes or no you put it in with everybody's bill paper email however they get it eweb

27:05 must listen to the people and allow them to vote directly this madness has got to stop the board has forced smart meters and 5g utility poles on us without ever getting our current uh we are asking for a truly democratic web thank you for listening thank you very much thank you thank you next up we have jonathan pinkist followed by mark lewis followed by charlie rojas hi can you hear me yep i can hear you i heard some really great uh pieces of

27:52 information and uh suggestions from the previous several speakers um the uh the young person who spoke earlier referred to the importance of maintaining habitat and the person who recently spoke on the engineering um really hit on something that's been on my mind which is why not consolidate all of this storage uh in the replacement of the college hill reservoir that makes that makes a tremendous amount of sense

28:38 this forest that's at the top of the hill uh and off of patterson is one of the few remaining inside the city and uh those who are attuned to the climate change that's happening and its impacts should know that all of our forests especially close in and urban areas are really important uh for the maintain maintenance of our climate uh the quality of our air and then there is the wildlife values and you have trees there that are in excess of 15 feet in diameter or real real old growth

29:24 you really need to take account of these things and rethink what you're doing um i appreciate you hearing my input thanks a lot thank you very much [Music] next we have um mark levinwoods followed by from real class followed by doctor

30:59 uh how about dr samuel schmidty are you there yeah yes i'm here can you hear me yeah we can hear you oh okay uh thank you president of lostford and he went forward for giving me the opportunity my name is dr samuel schmidi i'm the native eugenian who has lived through two and a half blocks the forest above 40th avenue played in those woods as a kid i knew nothing of this massive project despite being a journalist's historian who followed such things not till i saw a flyer on my porch last night that i know anything about the biggest infrastructure project in decades for eweb and this into town almost no one i know in europe knows either how could a project this huge and impact will not be properly announced in eugene oregon of all places i am an environmental historian who knows about the evolution of laws and social nerve combining environmental and language

31:44 decisions in the u.s and the lack of proper couple notice and debate on something this major goes into spirit if not the letter of most land use and planning laws and social norms in the post-earth day era we know e-web needs to expand storage facilities capacity but this inappropriate plan as we emerge from pandemic is not the way modern culture has been guided by the principles of transparency for public participation in land use natural resource planning as this plan goes forward to epitomize why those laws and norms changed in the 1960s and 70s no proper public notice no real debate on the inadequate leadership by city government on ewa's biggest infrastructure project in many years one that will hugely impact the killed nearby neighborhoods and south regime this project will compose clear cutting

32:29 removal hundreds of trees including old conundrums and oaks blasters and removal of rocket search for huge holes for the reservoirs for three to four years heavy trucks calling the free and construction vehicles to follow this will affect the quality of life soundscapes and business the ecology of the region and property values there are also tips to turning from covered-era remote learning at spencer middle school and edge of elementary school i went to see one hill above their tools being clear-cut and hear constructive noise echoing in the basement for gear my interest is not immune to life although some folks who live by will be impacted in this dream or a romantic voyage to my past it is a democracy and fairness issue as well as the ecological one this is a major disturbance disturbance project and must be debated

33:16 in the open we really urge the ewef board to revisit this decision and hope and really truly open public meetings thank you for your time thank you very much next up we have janelle south followed by jenna thrift followed by david uh good evening this is janelle and i am an elementary school teacher in this county and first i want to start off by can you hear me by the way yeah we can hear you great thank you i want to start off by reading um two of the seven pillars of envision eugene protect restore and enhance natural

34:02 resources and plan for climate change and energy uncertainty and we also want to read the e-web mission statement is described in its 2017 strategic plan it states our mission is to enhance our community's vitality by delivering drinking water and electric services consistent with the values of our customers our owners our owners we exist for the benefit of our local community those are strong words and i'd like to see eweb uh have integrity with those words i'm opposed as everyone else so far on this call to taking out this well-established

34:47 forest other alternatives need to be examined and given fair hearing there needs to be i'm requesting a public hearing as it's many college hill is the place to really be renewing to restore what's going on in college hill and still taking out an elder community of trees that is a habitat for birds like defiliated woodpecker tears sleep there deer give birth there to your nurse there they play there they forage there and beyond the animals that these trees give such a wonderful habitat to the children we need a place for children to have a regular diet of nature in their life

35:34 rather than fortnite and roadblock you need to get them off their screens we need to have them in nature we can't replace a community of elder trees with baby trees young trees can't give oxygen they can't give nuts or seeds or shade or shelter to animals and insects and people we need to not be thinking about the next 10 or 20 years that's too short-sighted we need to be thinking about 150 years from now what will be the impact for future generations where is the environmental impact statement how is this sustainable please consider what you're doing carefully it's important thank you for listening to my work

36:26 thank you very we much hannah thrift followed by david cinco hello uh i want to say that i opposed the plan to destroy the older part of the forest at 40th and patterson to create the water drinks there i just can't believe there are no alternative places to put the needed water tanks where forests have already been not tourists have already been turned into pavement there's a whole city there where the forest has been turned into pavement and heard a lot of people talking here about alternatives but before this meeting even started i i read an email given to my granddaughter that basically had all the

37:12 reasons why it should happen and uh and and disregarded the idea that there are any other viable options at all and i really believe that as a human race we need to find more creative ways to prioritize issues like whether we should be taking out more trees for anything especially our public representatives should have these priorities straight because without that it will cause the demise of ourselves and we will be unsuccessful in the changing the agreed upon issues we have locally and worldwide our need for every tree to fight climate change is one of the most important issues of our time

37:59 and i believe as well as many others not a single person here so far has testified otherwise as far as wanting to see no public policy and no other options considered at this point why is eweb not the source for how we all know that destroying this force is in progress for a public utility it seems like this opinion is being discarded as usual utility is listening because they have to but without the intention to alter course on the very public you're supposed to serve a very recent request meeting this publically should offer politician at this point because of the obvious public interest in this proposed project

38:45 and the lack of public inclusion especially after the very recently revised plan no reason is good enough to cut down trees in these times and i was honestly offended when i read your response to my granddaughter about why our generation should have the right to decide decide to destroy any old forest areas still left for our future generations with all the great minds in our world i believe we can come up with a better solution than this and i would like to request the utility to really think twice before you believe that a very reasonable changed plan is the only plan that you can come up with because it doesn't sound like you have to really study

39:30 this idea in a way that is prioritizing the future and more than just thank you very much thank you very next we much david zupan and then we will try again for sandra bishop and uh mark rubinowicz david are you there president sashberg i have not seen david zupan join the call yet um we do have um sandra bishop marco benowitz and charlie rojas on the line though all right so we'll start with sandra if you're there

40:16 hello this is sandra can you hear me yeah we can hear you okay great thank you so good evening my name is sandra bishop i live in ward 2. my comments are about the 40th and patterson project the abrupt decision on april 6 to double the size of a massive infrastructure project was a real breaking point for the neighborhood i've never opposed building one reservoir or water storage on this site located to preserve the forested area and there's plenty of room on this site to preserve the forested area and the extreme eastern edge of the property locate one 7.5 million gallons very massive water storage tank a little bit to the west in what you're

41:02 calling site two and then that also the third thing is it preserves the oak the oak habitat this is not an either or situation but right now with the issue is that the doubling the size of an infrastructure project of this magnitude that is not something that can be done overnight or should be done overnight without any public process since the decision on april 6 to build two reservoirs rather than the original one there's been no opportunity for public participation of any kind and now we're being told that on august 2nd the logging begins we need your help you're our elected

41:49 officials we are in this together we are not right you are not wrong we have a situation here where you're asking a neighborhood to endure an incredible change in one of the largest infrastructure projects that will be built in at least probably a decade around here so it now that covet is over all the public meetings up to this time have been very small and under covered shut down we are now past that and there's time to have a public airing of this situation you can hear from people testifying what they don't know about our water system we need an additional reservoir

42:37 you can have that without pushing this through and destroying a forest so it's possible it's doable it's the right thing so you do not have to slow down the construction of one reservoir to have an open public process so that's really what people are asking for so please work with us you know allow yourself to relax don't keep yourself separated from your neighbors your family friends who are asking you to reconsider building two up here it's unconscionable go back to the original plan that's in all the planning documents to build one reservoir now thank you thank you very much next we have mark rabinowitz followed by charlie rojas

43:26 mark are you there um mr rojas and mr robinowitz uh it appears that you're on mute oh mr rojas i see you're unmuted now thank you um i only received um notice of this project about a week or so ago i did a little less than that so you did a very poor job of notifying your over 200 000 customers that you were going to be doing this major project my comments will be uh reflected of the

44:11 email that was sent to me that was sort of a justification as to why this is being done it was called an adjustment in plans but in fact this is a complete overhaul you're doubling the scope and more than that probably the cost of this project i wouldn't call that an adjustment that's an overhaul second you claimed that it was vetted well the vetting process can only be done by the public or should be done with the public because of the fact there was so little understanding by the public that this was even occurring we had no chance or opportunity to take a look at the numbers and one of them being the fact that you're going to save 1.25 million dollars if we do this project based on a net present value net present values are a lot of hand waving wishful thinking and estimation

44:56 now you may be right you may be wrong but that's up to us to decide and have a process to be able to do that but i think the most problematic thing that i read was the fact that we're doing this project or you're attempting to do this project because of the fires that took place so therefore we need to speed this up well the fires are out but what you seem to have ignored is the fact that we've had one of the worst economic downturns in oregon history if not the worst many of your customers are basically facing eviction and a very hard time if if they're going to be able to survive to underscore this portland state university came out with a document a monograph in february 9th about homelessness at the time this was data compiled by portland state last year and they said

45:42 at the time at least 200 thousand households 53 of them with children are have no chance or no uh capacity to pay future rent now they admonish that it's going to get far worse because this was about seven eight months ago so you're talking about what 250 000 who knows how many but we can say this there are hundreds of thousands if not more oregonians and many of them here in lane county that are facing eviction and living on the street these aren't going to be your typical homeless you know stereotypical these are going to be working in middle class families and they are going to be your customers and seemingly they have been out of the uh out of the loop of this whole discussion so at this point in time you're deciding to unilaterally increase the cost of this project when many of us are

46:28 going to be facing eviction and in fact on july 31st the cdc is going to lift their eviction moratoriums so this is almost a done process you only have a few days and yet at this point in time you decided to go ahead and increase the cost 15 seconds and so i find it's hard to believe that you would in fact not consider the pro the public and include the public in this project thank you you very much mark rubinowicz are you there if so remember to unmute and is there anybody else in the lobby

47:13 waiting i am not seeing anyone in the lobby um mr ravinowitz if you're calling from a landline the code to unmute is star six i'm not seeing any other phone numbers who haven't speaking other than mr robinowicz that are in the call those who signed up who i have not seen please let us know if you're theirs and we're not able to see you katherine baker martha dickey william o'brien ralph mcdonald and david supan

48:03 all right well it doesn't sound like any of the other folks are there so the public testimony period for this meeting is now closed at this time commissioners are given the opportunity to comment if they choose and i don't know if anybody wants to raise their hand or i can just go around and follow people um john brown how about i start with you okay but if those of you that are still with us that justify this evening thank you um i i understand the the challenges of what you're facing and things but we're uh we rely on engineers and and input there's a lot of technical issues that go into citing a reservoir

48:48 that's why eweb bought this over 65 70 years ago knowing that it had the right elevation it had the lines there to get the water to it and get it distributed properly i wish we had an alternative but i'm pretty sure we don't the thing is that you know people talk about one tank they're okay with that but you know that's basalt and we have to blast place even the first tank and we can't build a tank and not blast for the second one and to blast for the second one we have to remove the trees where the second tank would go so even if we built just one tank we would still have to cut all the trees and blast because we can't build a tank and blast next to it because i'm sure that there would be a public outcry if we start setting off dynamite right next to a 7.5 million gallon tank it would compromise the integrity of that tank um

49:33 we've looked at this long and hard and we've done the best we can we're under a time mandate by the wagon health department to decommission college hill and we can't decommission it until we have some something to replace it and so we're in a little bit of a quandary here and time is a issue and uh um i understand your concerns but we also understand our concerns and that's that we have to provide safe reliable drinking water to over 200 000 people and this is a tough decision but i'm going to move forward thank you

50:18 oh sure i will okay thank you um yeah thank you everybody for taking the time to testify i wish it was in person i think we're getting close to that hopefully in the next month or two we'll be able to have people and face to face um barbara rabinowitz just so you know your email did come through so we'll be able to look at that and get your testimony from that anybody else who felt that they were rushed or didn't get all their points across please feel free to email us as mr brown said this is a complicated issue it's one that we've uh struggled with we have i personally have myself walked the property and gone up to community meetings at the property face-to-face meetings that were

51:05 facilitated by um staffs with the neighborhood you know public outreach is a is a difficult thing and it's even more difficult during covet i believe our staff did their best job to try and get the message out to people if you feel that you didn't get the message i i apologize for that but like i said there was a robust effort to get this information out there and we do our best to reach everybody but you you just can't until until somebody knocks at your door and says hey they're putting a tank at the end of the street did you know about it well i hope that you would um it's been a tough decision for me to

51:50 make you know i'm new on the board as of january so some of the background material on this i had to get brought up to speed on but i feel comfortable moving forward with the decision uh there are gonna be trees that are going to be cut there's going to be oak habitat that's going to be maintained and enhanced anytime we have a project of this size anywhere in the community there's going to be impacts so to say move it to college hill and you know the people who are at college hills are going to be coming by in front of us i understand that because i wouldn't want to have this right next to my house but we we moved through it for the betterment of the community um as far as as

52:36 you know being able to vote on this you know we are elected officials and if you think we've done the wrong thing we'll hear about it in the ballot next time and i'm prepared to live with that decision going forward and i will defend it and if enough people feel that i made the wrong decision and want to run against me i'm i'm more than willing to do that but i again i hear you guys but we do need to move forward and i i feel comfortable with you thank you thank you well thank you everybody for coming out tonight i really appreciate

53:22 all of the the feedback and you know even though it's it's hard to hear um as i i think your intention is um it's it's valuable information uh for us what i'm taking away primarily is that you felt like the the public process has not been um what you'd like it to be i mean i understand that you know you don't want the trees cut down i don't want the trees cut down i don't think any of us want the trees cut down but i do believe that eweb staff in combination with a number of environmental groups and otters and such have and the survey to the neighbors throughout over the last year and a half

54:07 they've done the best job that they can to minimize the amount of trees and to maximize the the oak um saving the oak that has the highest environmental impact and that i think is is really what i've appreciated in the process from eweb now on the the public process side i i encourage anybody who hasn't gone to the eweb website to check out the there's a list on here it says previous updates and announcements about the college hill site and i look on there and there's at least nine different emails that have gone out to neighbors um so somehow that isn't working i mean for me i i try to find solutions

54:53 how can we do this better i'm not willing to go back on the decision we made right now but i do feel like there was a robust process throughout there was there was emails that were put out there were at least two public meetings that were held on site at the college hill site we've had testimony at least nine different public um nine different e-web board meetings where we've had public testimony just like this so for me i i continue to wonder you know what what else do people want i know that that staff have gone and reached out to the neighbors um we've reached out to the neighbors i don't know how to reach out to people anymore and i wish that you know that we could have had some of these conversations before i know that the covid has really

55:40 challenged um you know some of the work here so it's not in person but i don't that doesn't mean that this isn't this is this is still valuable this is still a valuable um information sharing platform for us and in some respects people may be able to attend more because they can can come and visit now on the other side of it i mean i i i didn't personally think that we were going to have two tanks until i found out that we were going to have to blast the trees anyway and then it was going to cost us more than one million more dollars to do it later and that it was going to impact the neighbors even more because they were going to have to have what more than it was like a thousand more truckloads of dirt that were going

56:26 to be hauled in and hauled back out to ready the site it it just didn't make sense to me so when the when the second tank proposal was presented and those were the additional impacts it wasn't just the tree removal i mean i wanted to to reduce the timing for the trees as well when we found out we were going to have to remove them anyway it felt like a done deal to me honestly i i mean we already had to remove them and i i appreciate last point i appreciate everybody's feedback about you know having to or looking for other options i can i can guarantee other options were evaluated you know they have to have it at a certain height level it has to have a

57:12 certain capacity that's not an easy thing to find in that region so again i really appreciate everybody coming out um we have asked many of these questions we're all volunteers we don't get you know this this is something that we do because we care about eugene we care about making the right decisions it's something that keeps us up at night and i hope that you respect that that we have looked out as well for these absolute questions um so thank you i appreciate it i'll be quiet now thank you thank you i'll take just a quick minute and uh just want to say thank you the folks who took the time out of your evenings tonight to share your

57:57 your thoughts and opinions with us i also want to say thanks to john and john and sonia for covering a lot of territory and addressing a lot of the issues that i think were raised tonight there are unquestionably trade-offs and impacts from this project and sonia has suggested i think taking a look at the project website to see some of the real effort that's been done to try and demonize impacts and really weigh the trade-offs and and provide the best project we can give the needs of our water system um i have a lot of trust in our staff team who has done a tremendous amount of effort to do just that they've managed to

58:42 find a spot on this site where the the impact is minimized to just two and a half of the 10 acres of this property and they're protecting really valuable oak habitat that is exceedingly rare so there's definitely a lot of thought about the ecological impacts on the site and lastly uh we've all asked staff to identify and take steps to reduce very real impacts to neighbors in terms of noise and dust and truck traffic um and we're aware that it's going to be this would be hard to be in that neighborhood and have that construction going on but um we are asking staff to do all they can to try and minimize those impacts

59:28 thanks again for the input and um thank you um i just want to echo what my fellow commissioners have said and thank everybody for testifying tonight i know this is something that some people feel very passionately about including us i want to thank the staff for the great care that they've taken in coming up with this plan i know that in addition to their expertise they're also members of our community and they do care about this site um it was chosen 70 years ago strategically for eweb and one of the reasons that there is a beautiful forest is that we haven't needed to use it that site for this but we do live in an

1:00:13 urban area and there is there are trade-offs for major infrastructure projects so i'm confident in the plan that we've put forth i feel that there are some strong plans in there to mitigate as much of the noise costs and ecological damage that will happen and um i support all right that was a very long public input section um sure thanks president schlossberg for

1:00:58 the record people listening and audio this is frank lawson the general manager of eweb i i think there are a number of trade-offs the board spoke about that i i did want to mention to those who have talked about college hill specifically and other sites this is part of an overall plan that we have that addresses water quality and water reliability over a number of years we will ultimately in the next eight years or so have uh two seven and a half million gallon tanks at east 40th two new seven and a half million gallon tanks at hawkins and also at college hill those are matched in elevation specifically 607 feet above sea level those sites were chosen many years ago

1:01:44 for that reason we are also balancing the system for both resiliency as well as water quality and having two what actually seven and a half million gallons while it seems like a lot those are actually smaller than some of our existing larger reservoirs now so that we have more flexibility for o m and other maintenance costs going forward and so this is part of a larger plan and i almost guarantee that if we did one tank now waited a few years and then did the second tank people would be asking why didn't you just do this all at once and the reason for that was the 2100 savings of truckloads and the carbon

1:02:29 associated with those is is also part of this and i do have a great deal of trust in staff that they have made this recommendation in thoroughness and in logic and we appreciate your support on that we also appreciate the public process and the fact that people are willing to speak up even if they disagree with with us and so we appreciate that as well but thanks for the opportunity to contribute all right thank you um so now we're going to shift gears a little bit to agenda item number four we're moving into board action items and approval of consent calendar a

1:03:17 oh yes yes president schlossberg we would actually like to remove the uh what is the contract number to the burns and mcdonald's engineering company contract there's some negotiating specifics that have come out that we will bring that back likely next month i'd like to remove item 3 from consent calendar a for just a quick discussion i i moved to approve consent calendar a less item two and item three seconds second right all those in favor say hi hi

1:04:02 hi great that passed um before we discuss those items we're gonna move on to consent calendar b anybody have anything to say about those i move to approve consent calendar b second all right a yeah i guess rod's going to answer my question

1:04:47 sorry but this is more about process and visit the contract per se because i noticed that we had three proposers one from portland two from eugene and and the criteria in the background said all the prices are competitive with the people currently doing work for for these archaeological surveys and i but i see no award criteria for local and i really like to keep um all else considered equal i don't i don't want to hire somebody that's local that's not qualified but we had two proposers that were local and they didn't get the bid portland got the bid and for just the logistics of them coming down here and doing these archaeological surveys in these floodplain areas seems to me i i just i'm having trouble comprehending how that works in this contracting process why we we can't keep a significant amount of

1:05:34 money and it would be good work for them there's going to be follow-up work why we can't at least give some some credence to the local people and and if the statement is that the firm in portland's prices are competitive with the prices we're already working i'm assuming that's local that's just my comment i hopefully in the contracting uh we could maybe do that in the future it's kind of like a banking thing you know more money we can keep here the better it is for everybody all else considered equal so i'm going to vote to approve this but i would just like to make that point if i could what i guess what i hear is you're saying as part of the selection process have an emphasis on a local yeah as long as they don't i know some people get around that by just turn

1:06:19 around and they they hang a shingle and get a business license and they check the box but you know you can check out how they've been in business they've here but but uh just thinking of all the money somebody's going to spend coming from portland to do this work but we can have local people do it i would hope that we could at least consider that in the future on some of these contracts commissioner brown i'll just weigh in quickly um in an rf pre rfp process there is usually a pretty specific scoring matrix that's developed and and i'll work with debra hart and our procurement group to see how we could somehow incorporate a local preference or a local benefit

1:07:04 to what that might look like going forward i don't know that we have that now do we deborah do not she's actually on the line and prepare to comment if you would like that i would rather have her comment you heard it sarah okay thank you um so there is uh an avenue in our rules that allow us to have a local preference but it's very limiting in that it has to be an equal offer from any suppliers or vendors that we are working with and so in an rfp process there's generally some kind of distinguishing factors that lead to a selection of a firm based on the qualifications and the price we do oftentimes include aspects of

1:07:49 service being in a close proximity pricing would usually also drive for our local suppliers to be better priced for us um but oftentimes we do include in our rfp processes some aspect of local preference whether it's they have to be within a certain territory to be able to provide those services for us um so so yes that is a factor that we usually do consider to some extent in our rfp processes questionnaire would you like more follow-up after no i just want to get if other people concur with that there's a way we can give a tip and we're trying to reduce carbon you know just just the thought of people driving here and

1:08:34 whether they stay here or not it's just the logistics and it's the nod of i'd rather feed a local mouth than one from outside the area nothing against the people from outside of the area but i like to keep it local if we can yeah we'll look into that i appreciate that i'll uh if you want a motion to uh to adopt a uh item number three and uh calendar a second all those in favor okay now we're moving into general business items item number seven financial planning

1:09:20 well president schlossberg commissioners good evening um this is frank lawson and joining me this evening is actually a number of people they'll let them introduce themselves later we have uh before you this evening a little bit different approach than we've done historically when it came to capital planning and financial planning historically we had done a capital plan kind of separate although related to a long-term financial plan we're actually presenting this there are so they're so integrated with what we're doing we're presenting these together and i'll go through the flow here for you right now go ahead with the next slide please this is actually what we're up to this evening

1:10:05 a number of different steps what we want to do initially is to really get an understanding from the board as to your priorities and make sure that when we're developing our investment plans and our financial plans that we understand and have a a mutual understanding of the intent and the priorities going forward we'll then uh so we'll we'll reiterate some of those and check our logic with the board we'll then uh taking that and running with some of those assumptions and priorities and direction we will present uh how we think those investments would be made going forward we will then also look at the financial outcomes of that

1:10:51 investment plan that achieves again those strategic and operational objectives and then we'll end up with if there's anything we missed or further direction from the board and between each of these we'll have some board discussions to confirm and gather input from the board and make sure that we're on the right track go ahead ahead with the next slide please as far as where this fits in the process um we're really talking about the the red um that's a that's not a i guess a rectangle with on the left side really this is integrated quite specifically and directly with strategic planning it's about guidance

1:11:36 that then feeds into our capital plans our long-term financial plans out of that comes an annual operating budget and the revenue forecasts that we'll drive in in this case and this is the the first time we've approached it this way is a three-year cost of service analysis and then therefore pricing proposal this is not a one or done the board will get an opportunity to weigh in later on the specifics of those budgets as well as the pricing proposals so we're talking about guidance and direction today and then the board will have further input really throughout the fall and eventually we have to have an approved budget

1:12:21 before the end of the year go ahead with the next slide please as far as strategic and operational guidance there's a lot of words on this that was because we knew you got these presentations ahead of time and would get a chance to go through those i there's a few things that are worth noting uh as to what we think we've heard from you around priorities uh and guidance one is related very directly to customer rates and that it is acceptable to present plans that have rate increases that are relatively close or indexed to inflation in the case of our forecasts and it depends on on which forecast you use them for how

1:13:06 long that tends to range somewhere between two and three percent um and so if we look at a 10 10 year compounded that would be 23 to 33 we're also proposing and and um in and reiterating with the board we're not expecting to change customer care although there there is uh adjustments that go forward relative to um what we're trying to fund with customer care it's doesn't directly index with inflation but it's it's intended to really provide a certain degree of support for a certain percentage of our population from the investment perspective the priorities for water and electric are slightly different on the water side we're really focused

1:13:52 on a couple different things one is the source side recommending i think it's time to pursue the second treatment plan sometime in the mid 2020s is where that's that's landed in our investment plan and also continued investment in the importance of the mckinsey watershed recognizing that watersheds are important to water quality and water quality and reliability are the number one thing that we hear from customers that are important and then also the base level reservoir projects which we've talked about already and then the inter-time transmission for those parts of the system the electric priorities are a little bit different electric utility is working and dealing

1:14:38 with an aging infrastructure there's a huge amount of of infrastructure that's aging pretty much all at the same time that was because in the 50s 60s and 70s eugene was boomtown it was growing at tremendously fast rates and we were putting putting in a lot of infrastructure that is now aging at all the same rate and now 50 60 years old and we need to upgrade it and replace it it's not always a direct replacement but it is replaced to be more resilient and it is a pretty heavy financial burden to to do that all at the same time we also know that the electric and the water system both are dealing

1:15:23 with and you can look at all kinds of causes but an increased both rate and magnitude of disruptive events those those are everything from wildfires to climate conditions to cyber attack cyber threats there's all kinds of disruptive event events that that we're dealing with and then finally we do have and have included replacing our legacy information systems which we talked a little bit about back in i think it was last month actually or um yeah the june meeting about the importance of the operational and legacy and information systems slide please also

1:16:08 there's just a few assumptions that we're making we want to make sure that we're aligned on these some of them are very policy driven we know that there are certain metrics that we want to continue to maintain some of those are driven by policy some are driven by the fact that we we do borrow money and rating agencies consider these important we also have made some assumptions around labor cost escalation non-labor cost escalation and then two categories water and electric related to assumptions we make around consumption when you have a over 300 million dollar budget the degrees of which you're adjusting consumption do matter the water is has been relatively immune to impacts of the cobot economy

1:16:56 but for the next couple of years we are making some assumptions that the electric side has some reduced consumption of about four percent uh based on a called a coveted recovery or covet economy and then a number of other bullet points there related to bpa pass-throughs and assumptions made around wholesale markets and and other things and so we can get much more specific if you'd like but those are kind of the high levels and one thing you you may have noticed in the memo that you received was in the long term financial plan forecast there was a whole list of assumptions that are you know i just picked out a few here but on each long term financial plan water and electric there's a whole list

1:17:41 of very specific assumptions down at the bottom of each of those attachments and so i'm trying to get those out where you can where you can see them and i picked the ones i thought were probably most impactful here go ahead with the next slide that brings us to board discussion number one which is to get your feedback on whether you think these objectives uh are in alignment with your thinking um and and therefore you would concur or if you would um offer to amend either the strategic operational guidance or the business or economic assumptions going forward and so this is uh your opportunity to say yep we we

1:18:26 agree with this these are the things we want to accomplish or no we'd like to see something else so that brings us to discussion number one i'm brown i ain't going first but i'll do it so the two percent inflation i mean right now it's five and i don't know i mean i'm not an economist or anything but i don't see anything that would tell me that it's gonna be two percent i know a lot of the people that are projecting in the next three to five and ten years and leases and things when they have cpi adjustments or putting the floor in a ceiling on it certainly isn't floored at two it's more like three and it's capped at about six or seven so i'm just wondering if you're comfortable with that uh given what you've seen happen in the

1:19:11 first six months of this year yeah i'll make a couple comments and i'll actually uh let some of our finance staff weigh into this as well so so the one thing is this two percent represents it does represent a long-term escalation i think during any particular year or two we will probably see either upward pressure on that or maybe even dampening pressure on that in any particular year or two we also it's a little bit of a of a conservative assumption part of that is we recognize that we can make some adjustments through the levels of investment moving things around for example from a high inflation year to a maybe potentially low inflation year and so i think we felt fairly comfortable with the two percent um

1:19:57 but if if we're not now would be the time for the financial people to weigh in on your comfort with the two percent yeah we did um look at some external sources and you're right it was probably the lower end of the range that we saw um we're seeing some state forecasts that were in the back to the two and a half percent range for the next few years so i think just kind of based on the organizational priorities around uh containing costs and trying to manage on the lower end of probably driving towards the world but and that's kind of a company would be trying to maintain a great trajectory type inflation too i think that's what we'll kind of push yeah i see i see that i'm just wondering if when we're projecting like that with a number like that i don't know the economic

1:20:42 differential between two and three percent but i know that if i were having to pick one and i wanted to err on the side of caution i'd rather have it too high so we said wow we inflated it a little bit high and now we don't have to raise rates but if it's too low then we're going to have to have a rate adjustment that's beyond what we projected here and that's always more more difficult to swallow than the lower one yeah commissioner i would say where your dial comes into play i guess where you can actually make adjustments there's a couple of them one i'll just mention from the investment side is a pretty significant part of our investment plans are this risk-based investment we can turn the dial around some if it ends up being more than three

1:21:27 percent and we're very we are very sensitive in this plan to the impact on rates we could look at where we are with those investments and make some adjustments um across years if we do start to see repetitive long-term greater than two percent i think there is the opportunity to go back and revisit and make some adjustments and i did want to clarify that that two percent is not what is in the uh in our construction cost inflation assumptions it's not your construction cost because construction costs are up 30 percent right we don't have 30 percent this reality is if you go right now construction costs are up 30 in the last year and it's just killing a

1:22:12 lot of deals and i just you know how much of this is construction a lot of them and i just want to make sure that your your finger is on that pulse i don't know what it's going to do but i know it's a whole lot more than two so just if but if construction and labor are external to these projections and you guys are comfortable too okay but yeah and i'll just make a commitment for the finance staff we can we can look at a couple of scenarios where we can just check the sensitivity to that number i think i think that's probably a reasonable thing for us thank you and one other big cost that is separate is all the purchase power costs which are um we have a lot of contracted costs for purchase power that are outside the

1:22:57 two percent so those are just based on the long-term contracting prices okay thank you the other labor cost escalation that the percentage isn't listed there but i'm assuming that's not 2 that that's some other rate that also encompasses health care costs and things of that nature is that correct yes that's that correct commissioner carlson the labor escalator is a fully loaded labor escalator and it's something that

1:23:44 we try to index to both inflation which are the items you mentioned and also to our comparators in the marketplace so what you know those can have an impact as well and so we didn't list actually a specific number but if you'd like i can give you more details as to what that looks like while we're waiting for sonia to come back

1:24:32 sure online um so important decision one do you concur with or how would you amend the strategic and operational guidelines i guess for me um i would like i probably would like to learn more about the willamette facility because that was something that was discussed before i became a board member i was vetted and then it was put on hold for it's been what four or five years now and my recollection back in the day was going to be a 70 million project now i'm saying it's pushing close to 90 million dollars so not that i don't concur with it but i would probably like to go back and see what the what the issues with

1:25:17 that were i mean i know that just from uh just from a uh a layman's person's goes and puts his toe in the willamette goes and puts his toe in the mackenzie's it's different water right and so um you know just being able to know more about that project i understand that that uh it's an important part to our to our resiliency moving forward uh and i i again it's kind of going back to what we just went through with the water storage tanks how much do we trust our staff that the decisions are made that are right in this particular instance i don't have enough information about that that project to say yes it's right or

1:26:04 wrong i'm not saying that i want to pull it but i know that i have to do more studying on that before i agree to spend 90 million dollars on it um so that is is bullet point number one um you know business and economic forecasts it's a long-term financial plan you know we're talking 10 years out if you can tell me what's going to happen in 10 years from now as far as the cpi or all of that kind of stuff you wouldn't be sitting in this boardroom right now you'd be sitting at an island in the caribbean with a margarita in your hand so um i trust where we're going with it i think that there's factors that can help us hedge the curves uh i would hope so you know i think that that the rate stabilization fund is something

1:26:50 that you know if if we get a year that just hits us off the chart you know maybe we can dip into that reserve to help you know take the curve off of a rate increase so that we're not going having to go to a six or seven percent rate increase in a specific year that's what i am hoping that that fund is there for um or if not that we can come up with reserves that can help us block these major curves um so i'm okay with the business and economic forecasts i kind of am with commissioner brown if it was to go to three percent i could live with that but i feel comfortable moving forward but also wanting to get more information yeah and we'll the finance staff

1:27:37 later on will give you some of the specific financial impacts and we can really in pretty short order discuss some of the scoping and some of the history associated with the second treatment plan it is not the mckenzie but it's also not the detroit river and there are times when you you need water and we were about a thousand feet away from having to evacuate the hayden bridge facility last september it was put off for some good reasons we will give you that history um in one of the upcoming months so that you understand more about that project and and why also we did choose to delay

1:28:23 it um not not eliminated but postpone it there were some good reasons for that some associated with land use and other things and we'd be happy to update the board on that and also discuss the scope of the project with the board and where you would like it to go and then my last week is just i don't know which bullet point it's going to come under but you know we've also got the lieberg walter bill that's kind of just dangling out there in the evening and at some point i want that to be brought into at least some sort of plan that we can look at going forward right and uh rod will talk a little bit about

1:29:09 the near-term view of that and then we can also talk about the expanded view going forward thank you um before i go over to matt sonia do you want to finish your turn because you are now thank you i don't know something happened with it yeah so uh one other quick question about the assumptions under the electric specific section the wholesale forward market 44 dollars per megawatt hour that affects our revenue correct or is that a cost to us that assumption presently commissioner carlson that does affect our the wholesale market has a favorable impact on our revenue

1:29:54 as you know there are times when we are both buying and selling but on a yearly average we are a net seller and so that 44 dollars if the 44 went to 84 that would actually be favorable to have favorable tax for uf so at this particular point in time it is a favorable well it's it's it is set to be kind of a a mid point um not extravagantly high or low so it's it's basically based on projections that we we actually know the near term five years pretty well because we hedge out that far but you're correct it has a favorable impact typically on

1:30:40 revenue okay thank you i just want to make sure typically on those side you know obviously i trust staff's opinion they they understand you know where to place it i would just err on the side of you know maybe not the midpoint but even more conservative on that side you know bumping that price down and that assumption just to make sure because things are so volatile you know in general in what we're dealing with that just having a little bit more buffer there is typically to our benefit um and then last point that i wanted to make uh was actually related to what uh john borowski was talking about the the 90 million stuck out to me when i was reading the materials as i recall that it was 70 million so i'm definitely looking for some feedback as to what that increase

1:31:25 is and what we can do about it is it the current market in the current construction situation or are there other factors in play now that would have already put us in that that we didn't see four years ago so looking forward to more of that discussion as well thank you all right matt uh thanks uh first i appreciate the approach to the strategic planning and budgeting process um it makes all kinds of sense to me it's a little bit squishy but i'll get more comfortable moving along and i you know i certainly trust the staff to lead us through in a way that makes sense to us that is incorporating our feedback um i would second uh commissioner

1:32:12 brown's concern about the inflation just that just because it is uh in kind of an unmanageable spot from a year ago um and i'm hearing from both carlson and brown and i feel the same way like anything to just kind of hedge our bets a little bit a little more conservative seems like a good move so that we're not putting ourselves in a pickle and i know that that's your inclination as well um and so uh trust that all things beat we'll move towards conservative assumptions that more flexibility not less um along those lines i have a few questions about because i don't know the sensitivity of different assumptions in here i love the next iteration to hear more about these sensitivities but you may have um answers off the cuff too um

1:33:01 the water use assumptions uh water use dipped in or it is dipping in 2021 where suny is going to rebound in 2022 um one of the questions is does more water use or less water use drive up costs or put pressure on rates so um i'll try to distinguish between water and electric um on the water side we did not see a lot of impact from cobit in fact water consumption mostly driven by weather last year was was actually had a very strong year from a revenue perspective because the marginal cost of another gallon of water is low higher consumption

1:33:48 financially benefits uh up to the point where we would have a large capital cost um which would mean you know it's a near-term small marginal cost but it could be a large uh capital cost if you don't manage that through good conservation and other things so it's being we forecast that at 95 percent um that's how we capture some conservative conservatism in our forecast so that's about a five percent um revenue uh conservative number there okay yeah and i i figured that was the assumption and that was my assumption as well in terms of the marketing cost of water are we seeing and i understand that our water use is largely driven by weather are we seeing a pretty hefty bump i

1:34:33 gotta imagine right now with the heat that we're having right now is it significant or is it kind of within do you know what the water side or the electric side i don't have the numbers for for [Music] i believe both water and electric are both up because of the most recent heat waves really um air conditioning for this time of year air conditioning loads are higher right last time i never was at eight percent or so for the month if that sounds about right and water water significantly up as well we also um saw a big one very early in the season

1:35:18 but like irrigation coming from very dry conditions yeah i just would like us to be thinking about and i mean i know the team is thinking about like what you know if this kind of weather pattern continues because rumor has it how is that going to affect our budgeting over 10 years if we continue to seek heat like this or a drought um does the time of annual peak electricity use affect rates so uh not significantly at the moment um what we're seeing so the biggest variable on the electric side is weather it it we are still a winter peaking utility

1:36:03 right we are seeing some indications that across the region there's a greater pressure now in the summer that's a regional pressure we are seeing you know this year we saw a strong consumption this last month or two on the electric side if we so i would say if we continue to peak more and more in the summer that's where you start to see more and more pricing pressures as well so that could have a negative a place of strain on margins so but we also um see some strains during peak in the winters so heat conditions definitely affect the

1:36:51 the price of the wholesale market and in oftentimes those cases we are a consumer of the market not necessarily a supplier to the market and if our peaks lessen in the winter and increase in the summer relatively does that overall have a change of price or as it kind of comes out i i'll look at that further my my inclination would be that that's going to have a negative market margin impact on us it'd be unfavorable partly because the resource base in the summer is getting less and less so hydro conditions and other things are leading to more water and pressure in the summer and we've actually hedged ahead in august for example to compensate and actually do it

1:37:36 more and more to try to mitigate those impacts that would be my my inclination but i can follow up a little bit more yeah and that's just one of the another one of those places where i would hope we'd be a little conservative in just assuming that we might continue to see that right and we do on the electric side i will point out the conservative conservatism comes in what we call a contribution margin risk factor and that represents a five percent water issue five percent pricing issue or a five percent consumption issue so we we size that and we we conservatively estimate our wholesale revenue which is where we capture that so we do look at pricing and also you know water levels as well because those impact our margins

1:38:22 right yeah i appreciate the conservative assumptions it certainly brings me confidence as we're having the conversation and i figured that i know you lean that way anyway it's helpful um all right three more questions i'm sorry for taking so much time here um i'm curious about reliability or outage measurements or assumptions are those i mean i guess we're assuming the same reliably we have today maintain the same level of reliability we're not shifting those around yeah mr price and mr um mr wally and mr tyler will talk a little bit more about that the assumption is that we need to make investments to maintain our reliability on the electric side and there's some investments on the water side

1:39:07 to actually reduce brakes per mile and those kinds of things so probably some improvements on the water side and maintain on the electric side right and then what about the assumptions in terms of carbon intensity of our electricity i know there's some requests for example to go to 100 uh you know renewable over a relatively short period of time perhaps this 10-year window super useful to me to understand what kind of price implications i would have on our rates but i do wonder what our assumption is we assume the carbon intensity of our electricity remains the same or gets reduced or do we have assumptions about the carbon capacity so yeah that's a great question and it's one that's that's not fully answered at the moment we've made assumptions

1:39:52 around what we know for contracts and the expiring of existing resources so from that perspective it would i would estimate it remains the same which is which is actually very good the integrated resource plan that we will be working on over the next year and a half or so will identify if there's different areas of investment that we we need to make relative to those generating resources and potentially improving on what we have right now that information is not included yet in the long term financial plan simply because we have we need one plan to feed the other plan there so but at this point i would just estimate it it's going to remain the same

1:40:38 and then what about our assumptions in terms of electrification of currently fossil fueled energy sources yeah those what we've done is a very small escalation and in fact for the most part our plans right now assume that we're using conservation to offset growth and so there's very little put into the plan as far as increased revenue for example from number one or cost for that matter depending on if our system what the impacts on our system is so it's pretty neutral to that right now and when we have the electrification study that's coming out we're gonna draft in august will that suggest kind of implications of different levels of electric pollution yeah it will yeah and lastly the

1:41:24 question about our efficiency assumptions we assume that our efficiency investments really including what they are today yeah so it's great that's a good question also so if we look at some of the in fact the inflationary adjustment inflation that was talked about earlier we've actually seen some near-term escalation greater than what we what we published the what we'll have to do is to use efficiencies and other things to actually maintain something that's more reasonable to inflation some of that is driven by our own segment in the market but we recognize in order to really keep that pace we're going to have to gain efficiencies throughout that and so those are those are really just assumed by looking

1:42:11 at this inflationary factor and say does that seem reasonable well it's probably higher but we're going to have to use efficiencies to achieve the assumption that we're making and when you say efficiencies are we talking about energy conservation are we talking about other kinds of efficiencies i was talking about internal operating efficiencies okay um so then my other question would be around conservation or conservation investment what do we assume that means are you all the same we are at this point yeah i think what we'll find um over time is that those investments um the payback on those investments including for customers whether you start to include carbon pricing and other things will start to shift we have not put those assumptions again okay all right thank you all for your

1:42:57 questions with my questions thanks for building that's all i have fun just to build on something that matt was asking about before about um how that all affects our planning and our assumptions and i'm just wondering if in my future iterations that can be made a little bit more transparent how we're thinking i know the folks that are hedging or the people that are doing all the financial planning they really think about weather and i know that it's in the forefront of their minds but i'm just curious a little bit more curious about the um like financially how is the changing weather affecting us

1:43:42 or i know you're saying that we're not really summer peaking maybe because a lot of people don't have air conditioning units yet but that will change and and design will change so anyway if in the future we can just have some more of those assumptions be a little bit um just more obvious for me yes presidential now is that the trends we're seeing now just continue um if we want to do additional modeling which it sounds like you're asking for some additional um look at some different ways of looking at the impacts of consumption patterns i will call those whether those are summer or winter peak related or off-peak related we

1:44:29 actually have to do that again as part of the integrated resource plan because part of the purpose of that plan is to understand the value of things like conservation and load shifting for example or peak shaving we don't know those values yet until we run some of these models and can figure out because we don't know exactly how much we want to invest in it through new products and time abuse and these types of things that's going to be an important outcome of the integrated resource plan one of the resources is the customer in and that's the part that we need to figure out the value so that we can price our products appropriately going forward so that's all of these are very timely questions that are hopefully will we will shed more and

1:45:14 more light on over the next year or two year and a half awesome great okay just one more question so so when matt was talking about leaning towards the conservative side if we lean towards the conservative side on these is this an economic forecast that what that means to me is that basically rates are going to have to go up to to compensate for that for that uh being conservative on our on our guesses right because there's only one place if if we're saying go conservative on this go conservative on this go conservative on this we've got to come up with that money somewhere and that means the rate increase is going to be higher

1:45:59 so it's it's it's easy to say lean towards the conservative side but what that means is in a long-term financial forecast rates would go up is that correct am i am i doing that right you are correct i would i would characterize the request to be conservative a little bit differently and that's i think one of the things we strive to do is to be financially resilient if you are overly conservative and drive your rates up and your assumptions don't live up to that conservatism in essence your customers are overpaying for the services they're getting in the moment right in the year by year you do want to look at this and we do try to look at this over a period of time

1:46:44 we know that for rate trajectories and other things we want to make sure we're making reasonable assumptions and we have financial resiliency built in for those cases when you have the need to adjust but you're absolutely correct if you're over conservative then your customers in any particular year might be overpaying if you under do that then you're starting to draw on reserves which previous customers have paid for so there's a there's a balance there and then okay that's good so that's why we want we're going to get it as close as we can because i don't want to be like i said i don't want to be taking too much from the people who've paid before but yet i don't want to burden

1:47:29 the people going forward just to build up my reserves right yeah that's correct yeah and when i said conservatism at least the way i was meeting it was less about um building up reserves and more about trying to maintain some level of flexibility and not putting ourselves in a position where we're forced to raise rates when we're not expected understood i understood yes yeah i just wanted to be kind of bring that clarification to it yeah thank you that that is a very relevant one right well if there's nothing else we have a five minute break so we will come back at 7 55. all right

1:48:19 we are back and we are on agenda item number nine financial planning part two so good evening commissioners uh for the record my name is rod price i'm the assistant general manager and tonight with me is molly mccullough our uh water engineering supervisor and tyler nice our electric division manager and we're gonna give you all the good details on all the stuff we're doing in the capital uh proposed capital plan i just wanted to point out a couple things here uh the goal of our our capital plan both plan is to basically safely meet u.s strategic plan you know at the heart of it's completing our compulsory work and maintaining our reliability

1:49:06 while at the same time working on our resiliency so next slide please how are we going about maintaining reliability well uh part of it's replacing old stuff uh frank talked about the level and some of the stuff that was installed long before i was born probably but we have many systems that are what i would call near the end of life i'm not going to say the end of life because that would mean they're not working but they are near the end of life meaning they are closer to failing in the likelihood of things failing and it's not just the the electric or whatever there's rit works so when you think about age of systems uh it's all relative right the i.t systems are 20 years old and they're

1:49:51 ancient and so modernizing is another way uh finding new ways to increase efficiency expand capabilities using technology to to help us uh get better stuff right another key thing is to balance with o m so we were doing a lot more planning and asset management trying to line up our our capital investments uh with the ideas of reducing maintenance for one that's just an example but standardizing consolidating for spare parts a lot of those techniques are really what we're after next slide please increasing resiliency so how do we increase resiliency

1:50:36 a big piece of it's hardening our system uh making it more uh resilient and uh i think frank mentioned the increasing frequency of disturbing events or however he praised it right there's a lot of stuff that's coming our way earthquakes and fires and so forth so how do we we make our system harder so wally and tyler we'll give you some examples of that um redundancy i think the really important piece of hardening our system has to do with uh redundancy multiple sources for our products multiple delivery paths and again

1:51:24 another important thing is creating flexibility so what we want to do is have operational systems that support uh you know our future things coming along and sometimes we don't even know what those are but uh we've we've talked about climate change there was a lot of discussion about climate change what does that mean do we have capacity to supply electricity and water when it gets hotter when we don't think it's going to go here so those are some really important components that we're working on too in the capital planning i can mention a lot of the flexibility to the business systems that go along with that so it's not just hardware it's the ability to work with our customers to use these systems as well so next fight please

1:52:12 this slide might look like an ad for a new truck to my wife but it's not quite that so this is really a nod too for those of you that remember richard jeffrey it's kind of a nod to my old colleague that just retired here he used to talk about the electric system as a cadillac system i'll be at a 59 cadillac right so i think you kind of get the gist here our strategic investments uh are going to take us from an older cadillac to a newer modern vehicle which is full of more features four-wheel drive you name it but more secure and hopefully a lot more reliable we're at least maintaining that reliability but will give us features and things that we can work on what's not really covered in this analogy is the idea of capacity one of the reasons it was called the

1:52:57 cadillac is maybe uh we were over or built or or some things like that both in water and wine break and so one of the things that uh in both wally and tyler again we'll address this a little bit so listen for that how we're going to take our system and right-size it for the future but we're not over built necessarily so we have reserves that we need to cover the future and minimize our make our investments next slide please a couple of the big items that are not included um basically are the capital plan includes telecommunication work that is to rebuild and support our

1:53:44 existing infrastructure fiber radio microwave that's for our own operations and for the public safety networks that we support there's a couple uh projects i listed there mckenzie river recovery work and the wildfire education so those are examples of things that are ideas that are forming uh that we just haven't brought to the board into the table yet and are not fully scoped enough yet to get into the capital planning portion yet um i forget to ask somebody asked about liberty john and so in the the capital plan is uh some money set aside for mitigation of the current situation where burke has asked us to

1:54:32 have the canal off until some of the current situations fixed there isn't any uh money in there for the next phase of that whatever it is and so um there are also some other emergent dam safety issues i mentioned the dirt's old when it gets down to it so we are seeing more and more convergent situations in the safety world through what you're concerned um what's included in the plan i'm just going to turn it over to wally to let him talk about the water tyler's going to follow up [Music] the next slide

1:55:19 yeah so i'm just going to wally mccullough water engineering supervisor i'm going to run through the tenure water capital cip and kind of what's included what we're getting from it it's kind of the summary books was included in the background you know it's a 10-year total a little over 300 million dollars pretty much evenly split between the first and the second five years a little bit heavier on the third five um you know behalf of the plan is uh compulsory and strategic and about half is based on a revision-based work and i'll try to talk a little bit more about that in some of the more discrete projects that are the number of projects in total risk-based those are all based out of our water master plan which we redo every 10 years it's a state

1:56:05 mandated plan and kind of reliability and resiliency is really the focus of all that risk-based work as well as our strategic work next slide jumping in the compulsory work um you know this isn't the exciting stuff not for engineers or something for several people it's the uh you know that's all the stuff you have to do it's you know it's the new services when customers call in they need a new meter or whatever um it's our e-web costs for redevelopment subdivisions it's um taking care of the things that break you know it could be a piece of hvac equipment the big pump uh the myriad of chemical feed equipment

1:56:51 but it's all of that all of those type of um costs really um the expenditures in the capital plan are based on kind of trends history of trends you know we can't we don't know what services work is going to be what failed equipment is but we have a good record of what's kind of typical for what's coming up and a good example is our new services there's the capital plan includes about a million and a half dollars per year for new customer services and every few years we'll adjust that up based on what it's doing in the past what we think it's looking like in the future and that's one reason we come back next year and we may have a 1.6 million dollars or a 1.4 or something let's just kind of look at those trends

1:57:37 on some of that work um the total 10-year investment in the for compulsory work we categorized and categorized as compulsory around 54 million dollars and it's categorized as compulsory some of the projects i'll talk about later are also considered compulsory um for instance uh the first reservoir east 40th avenue compulsory line category because that's the minimum amount needed to get college shell out of service um you know the benefits of our compulsory work is really just doing what we need to do to stay in business and meeting the needs of our customers so it's kind of the bare minimum

1:58:23 next slide moving on to strategic work and the plan is ami i'm well familiar with ami it's the the last two years of ami implementation on the water side is including the plan for 2022 2023 and there's the biggest item by far in our strategic work is our second source plan um well you mentioned john i mentioned the 70 million dollars versus the 90 million dollars it's the same plan the 70 million dollars was the 2014 2015 cost which the 90 million dollars is the inflated cost to the estimated time of construction from

1:59:10 between 2025 and 2027. so it's just an inflationary factor that is the difference there that's the same plant it's a water treatment plant on the willamette it's a robust treatment plant to meet our minimum demands it's robust in its treatment capabilities can handle algal toxins or pretty much whatever you can throw at it and it's seismic resiliency it'll be designed to um you know be back in operation following a seismic event within a day or two the capital plan has this starting in late next year as far as design and permitting with heavy construction starting in 2025 lasting three years you know the

1:59:57 benefits or you know increased resilience of our water resource resource security kind of read through that uh one thing i want to mention is it's i'm really apparent to some it really also gives us operational flexibility our hayden bridge filter and we spent the last decade you know upgrading our hayden bridge plant with all sorts of redundancy but we can take out pretty much whole half big parts of that plant and still produce water to some level but there's still some components we're really having one source an example is our 15 milligame 15 million gallon reservoir that we have at the planner palm station

2:00:42 we built that reservoir in 2003 it's never been drained we can't take it out of service we don't have the time to take it out of service recording it and all that get back in service without an additional source of water so we're making do with diving inspections of it as best we can but having a second source gives a lot of operational flexibility especially when hayden bridge ages more you get more options for improved efficiencies and maintenance and next slide um flipping to our kind of risk-based work the first item is our main replacements and what you're seeing in a plan is an

2:01:28 increase in investments uh almost doubling our annual expenditure is increasing from about four million to seven 7.5 million over the 10-year period total investment just under 60 million dollars the reason we're doing this is you'll you see a quarterly report every year which i'm sure everybody's really excited about reading it's like 50 pages long it has a lot of benchmarks and kpis in there and the table on the left as there's one kpi we look at our benchmark that we look like look at and so leaks and breaks for 100 miles high and we've been watching this for a while and our you have two year average actually over the last five years we've exceeded the average kind of

2:02:13 benchmark guide for leaks and brakes for 100 miles per hike given that we're kind of doing a ramp up it's not a sudden increase but we're doing a slow ramp up in our main replacement investments to drive down that number maintain our reliability numbers i think there's a lot of other benefits you know reliability but it's also resource resource sustainability you know taking care of the water you have not letting it leak out um reduction also main breaks are nothing to have in the neighborhood or in the street in front of your house so uh it's all all good there

2:03:06 now flip to the next item would be pump stations and small reservoir upgrades this is all the work our facilities in our south hills you have about 27 pump stations and 20 reservoirs in the south hills that we maintain and continually operate to maintain reliability in a plan there's new pump stations three new pump stations in the near term and then long term there's funds in there to provide one new presentation every two years um we have two new reservoirs in the plan an upgrade of the shasta 800 reservoir and also a replacement of it's not just an upgrade but a replacement on our existing supervisory control and data acquisition system our scada system

2:03:52 that's currently in the process and we're hoping to implement that in the next couple of years actually in total 10-year investments around 16 million dollars for our kind of southville facilities benefits a lot of modernization they're all older facilities a lot of these pump stations were built by development as it happened over the last 30 years and then left so we're kind of a lot of modernization of communications and controls and enhancing the reliability adding backup power where where it's appropriate and building a lot of 1m efficiencies next slide

2:04:37 can we jump into our large base level reservoirs this is what we've already talked about this but the public input today but it's really the capital plans the implementation of our distributed storage approach from our master plan those were on who were on the board back in 2015. i talked about that a lot back in the day and we're getting to the point of implementing it in the plan we have two tanks at east 40th and originally in the in the plan we've talked about this there was one tank now one tank eight years out or so and through the tbl and some other work kind of shifted those together right now

2:05:22 there's two tanks at east 40th followed by two tanks at hawkins site and then two tanks at college hill which is the current plan with a total 10-year investment of just over 70 million dollars um a lot of storage resiliency benefits operational efficiencies i think rod mentioned and frank mentioned with being able to take one reservoir out going to smaller reservoirs versus the really big ones so we can maintain them take one out of service while uh really having a big effect on our system we'll be adding local you know it helps all the local older distribution sites because these will be seismically robust reservoirs they'll be able to hold water during it

2:06:08 following an earthquake we can deliver that water or we can distribute it locally lastly i want to talk about a little bit about the transmission system our work the figure on the right all the red lines it's kind of our resilient spine or hayden bridge plant all the red lines or transmission systems so that's what we're really trying to harden as part of this part of the plan and most of it's in pretty good shape so in the plan on the transmission side we have a completion of the headquarters in nicabacher pipeline people here have approved contracts for the first two phases of that work

2:06:53 that was actually originally planned for later in the master plan and the out years we brought that forward primarily due to the city acquiring the headquarters site we wanted to get the transmission line across there before they built buildings next to it and paved over the top of it and their second phase we were hiding ahead of a city street um a city bike path project and so that's in construction right now should be complete within a month or two and the last phase which is in the plan is the um section down franklin and we'll we're timing that with the city upgrade to the franklin boulevard um hillard street transmission main this

2:07:38 is to help feed water to and from the east 40th sites that's in the plan that's being coordinated with a street craving of hilliard street a couple sections on east 40th and i forgot to mention on the map on the right all the little blue lines which there isn't a pointer here but those are all the new transmission systems and projects we've got some work up at hayden bridge we're replacing one of the raw water transmission mains that come up to the plant and one section of finished water main that's been leaking lately and some other kind of resiliency work i'm utilizing one of our old 30 inch transmission lines to get something to

2:08:23 redone at crossings but really it's a total 10 year invoice meant just over 20 million dollars in transmission and a 10-year plan and it's all about resiliency redundancy a lot of operational enhancements also on the transmission side i'm going to turn it over to tyler to talk about the lighter side thank you wally the kind of nice electric division manager for the record and i first wanted to say really exciting to bring this plan here uh you know when when we look at this it it really speaks to what the system needs and really the vitality maintaining that for the community so that the like money from there when people wake up in the morning and the community needs and that's kind of some of the moniker here on the reliability and resiliency r

2:09:09 squared uh really this plan is getting both of those things maintaining their reliability and increasing resiliency and you know what a lot of the things wally talked about and rod before about the different categories and the types of work very transferable to electric pulls and wires instead of pipes and valves uh so what i wanted to do in this in this bit is talk to you a little bit about you know our biggest fish highest value projects and some of the suite of work that's in there and kind of hit some of those w's of what what it is uh why we chose it and and what and when it's happening so we talk about when we talk about when we go fishing we're looking for the biggest one first so here as far as our indexes we're looking at substation outages is one of our highest values to

2:09:56 to look at you can see on this screen here the cd and safeties from last year that that sharper spike was a substation outage is there usually three to five thousand people go out for a couple hours while we respond and switch workout switch switch the outage out and that that can account anywhere five to ten percent of our our yearly safeties mercedes and over the last 10 years rod shared with you in a previous presentation that those have been increasing so we're trying to hedge that we can go next slide and so what first part is what is in the plan uh not that you have to know what every box on here is but but you basically just have to know red bad green good and what we do is kind of analyze our system we line out all the different 38 substations and look at each piece of equipment and

2:10:42 some of these are based on age some on testing results some on outage history and and we rate that and when we go through that then we look also look at system and customer impact some of these might be a really high impact to a customer base or a lot of customers or it might be really high impact to stability the system or or power production and then we we go through and we prioritize those based on those factors and then see how much we can shove in the plan to hit our funding constraints and then then see where we sit risk-wise that's what we've done here and go to next slide that's kind of what's in the plan all those red boxes the game is to to turn them to green over time and where this is a map of the substations that are funded in the project in the in the plan to get replaced over the 10-year cycle we have 38 total

2:11:28 and at the end of that analysis we find that 14 of them are going to result in in the end of useful life they've reached their their mature age and or they're experiencing issues through testing and failures now two of them are funded and uh and also we have through our type one work individual fleets of equipment that we may replace you know some breakers per year or transformer per year that all that combined comes out to be about 27 of the 456 million uh 126 million dollars worth of work another thing to note on this map is you can see that things are centered there's some up river and and but there are centered around the center part of town kind of like frank and rod were talking about before uh city was built uh from from the

2:12:15 inside out and those happen to be our oldest stations it's also the most interconnected part of our system that that is the electric version of resilient spine that carrot connects up river and and in town and also some of our more vital loads in the central part of town the next slide this graph is really showing us the when and why uh and a little bit of explanation here green is good so these are representing commissioning dates of future substations size of the bubble is the amount of money relative and then uh the the higher it is on the scale the more of a reliability driven project is more just old equipment that needs replaced renewed and the lower on the scale resiliency driven there's some kind of opportunity or something there

2:13:01 so in the first few years then this is the first five years of the plan and i'll just highlight a couple of the big ones in here the first the first year year and a half is really centered around scaling up internally and with our standards and contract to be able to achieve this work this is a sizable amount of work to renew the system and we'll have to put people in to be able to accomplish it so that'll be both the people and contractors getting that set up but also we'll start hitting some of that smaller work curran is uh in planning stages right now in design and that that's centered around our largest substation by by size and complexity and it's really in the central heart of our resilient spine connects with bpa

2:13:47 connects up river connects a lot of our our downtown load so that's a really important one and it's an end of life uh and then zooming zooming down the line another one to highlight is the ip uh station that that has both generation and substation work involved in it it comes out to be about a 25 million dollar project all said and done uh like says has some power resourcing and some and some equipment outage we're trying to avoid and with that one really that that accounts for 10 that's one customer in one generator but it accounts for about 10 of our our revenue overall um and so that that essentially you know not like a for profit but it pays itself off pretty quickly to be able to avoid that risk of outage and then the the part on the bottom there responsibility mentioned that

2:14:32 this work does drive our age of system down within our metrics uh without this work it would it would get driven up or maintained out of out of that metric that that the financial folks can talk more about we go to the next slide the outcomes and opportunities you know we're not looking to restore a 59 cadillac to its original beauty but we're looking to to leverage some new technology and new ways of thinking to uh to create a new system for the future modernization uh really that's part of that there's there's opportunities in distribution automation to be able to to use that flexibility in the system to switch things out quicker ami will provide some use of new products and services in the future capacity in the electric business copper equals money and so we have a lot of capacity in the system that's that's

2:15:18 kind of what i think the feeling of overbuilt comes from but we also have a lot of is flexibility and we want to maintain that flexibility but put in less transfer transformers basically less copper less money and procurement less money and equipment and that that's going to be an opportunity there and then resiliency highlighting seismic upgrades on here that's that's one of many things we're shooting for but each one of these projects over time especially in the substations and also another other equipment throughout the system will get seismically operated that's one benefit out of out of redoing some of these we'll go to the next slide and so the next few slides really are just a a kind of you know summary of some of the other things that are in the plan to give you an idea

2:16:03 so the type 1 programs these are the things we're doing year in and year out uh more fleet replacement through these through these uh distribution system that's more the polls and wires poc maintenance underground cable replacement plan that's one that that i would say is the number two leading factor in city safety influences is when we trip off underground cable especially feeders so that's one we're going to be targeting and then the rest of the substation transmission controls that's another about quarter of that 450 million dollars to target next slide generation projects themselves is a big big piece of work in there as well i already talked a little bit about the ip turbine generator rebuild that's focused on renewing the generator the turbine and

2:16:48 some of the controls in that facility uh the lee bird come out canal mitigation it's a placeholder right now around 20 million dollars that will come into focus as we make more decisions and analysis this year and next and then carmen smith re-licensing that that's an ongoing project but these next six to seven years really is when that's going to uh be completed in the plan that's another 73 million dollars so all that another roughly quarter of the plan the next slide is more on the support and shared projects uh really important to the backbone of us doing our work period and all this is required to get it done so as mentioned earlier the the erp i know you saw a presentation from travis few board meetings ago about that that's your mark for around 23 million

2:17:34 and that's going to ensure we can keep up with our customers and what their expectations are and also just maintain our business processes buildings and land we do have some plans both expansion of our operations here and providing some resiliency for our operations and continuity but also uh upgrading this this building to current seismic code as well it's another 10 million and the last bullet there is really smaller on the on the end of the scale of uh money but but really high value and really needed and that's a telecom fiber and radio all those things that we're going to be putting in that are modernized or are going to need communication to to work and so that's that's an important part of the plan as well so with that again really excited to share this with you think it's really uh needed to keep the reliability and

2:18:20 prepare for the future so appreciate that and with that i'll pass it back to so i'll let actually rod mitigate this this particular section i will just a couple of clarifications that i i heard the benchmarks we use on the water side come from awwa which is the american waterworks association and then on the electric side we use appa which is american public power association so we also have our own standards but we do use industry benchmarks and then you know the current substation that was mentioned which is really kind of a near-term um pretty hefty project that's the substation that's located on i-105 and

2:19:06 i-5 kind of that that corner just to the north of watson stadium that you can see from i-105 it's a it's named for mr curran who built it a long time ago i suppose but anyway just a couple clarifications um in there rod can i guess uh work with you president schlossberg to see what other comments and questions you might have all right thank you for anybody who would like to go ahead and jump in sonia i would like to go back to slide 24.

2:19:57 uh that one yes so in light of the recent conversations that we just had in the testimony that we heard tonight i find it curious so i'm hoping you can help me understand this graph a little bit it looks like the blue line has how much capacity we have and it looks like there's about 15 uh i guess the the level the units are not labeled here but 15 units that is associated with what we're building at the reservoir and essentially 15 units of what we would be decommissioning for college hill right is that correct okay so if i take that down 15 i see we're at about 55 whereas our need

2:20:43 is only about 48 and i'm just curious if you can talk to me about the that need right there because you know we've been analyzing and i just wanted you know triple check that we can't build it at college hill and why because this diagram is different it it paints a slightly different picture than what we've been told and analyzed yeah i could see that um i would say that the red line is our minimum demand and um it's really the comfort factor of where you want to be as far as how close to that red line you want to get and it's all about kind of building out into the future

2:21:29 the trajectory we do drop below the red line in in the future but we have a decision point that's kind of not shown here and when and that's a decommissioning of our santa clara reservoir and whether we actually decommission that or we have replacement storage built somewhere else ahead of that time so so this so this red line when you say storage required what is that number based off of it's the minimum storage required to provide um this is strictly a number based on um minimum operational storage um fireflow storage and um

2:22:17 yeah basically those two components operational capacity and fireflow in emergency storage commissioner carlson i would also weigh in that that based on commissioner mccray's comment earlier we we are starting to see peak demands uh within the system also increasing and if i correct this this was based on one of the former master plans right for example last weekend we saw a single day consumption in eugene of over 50 million gallons in one day um and you're the the units on the left that that's that's basically one day of storage

2:23:02 that we have in the system and so i i actually you know wally says this is minimum but i also see this pushing having upward pressure to it okay it would be helpful to know what the variance is when these kinds of diagrams are put out there because i can guarantee people are going to be looking and analyzing this very closely especially in light of you know recent conversations and if somebody else sees this they're going to have the same conversation the same comment and questions that i had so understanding what the variance is it's really hard in anything that we do because there's variance right i mean there's there's not a one-line graph or anything there's there's always a minimum and a maximum and kind of the range of demand

2:23:47 um so this this gives me pause i would also say that you know we definitely need to look out at this you know this outer time frame here where it dips below um so i'm glad to hear that there's you know a decision point that we're going to be looking at um it does seem like there's that takes some time so i'm curious when that decision point comes up because these are such large projects i mean this project just took us a year and a half to just you know make a decision point whereas we already had the land 50 years ago is this something that we're going to need

2:24:32 to buy land for is it something that you know so looking out on that other horizon and when we bump up against that decision it would be helpful to know yeah and and um that that decision you know in the outer years i mentioned you know a lot of the risk-based work is really made based on a water master plan which we completed in 2015 the next update we is 2025 and so that work will really start in a couple of years working on that water master plan planning out the next 20 years cip get it done by 2025 and then during that process will be when those decisions will be made regarding storage in the future and that takes into account a lot of things about division eugene where's eugene going to

2:25:18 be growing and all the growth projections and that so i think so great mr carlson you also mentioned the idea about why don't we just build rebuild uh college hill and so part of the plan is this distributed uh idea and wally mentioned the the problems that uh hayden bridge they can't take it out well uh college hill i mean it's the same kind of problem when you get a tank that's so big it's hard for the maintenance and it's the water turnover time so there's a water quality issue here too that goes on that the distributed water system and the distributed tanks having smaller tanks creates a lot more flexibility for the system if you have an earthquake we

2:26:03 don't who knows which part of town the pipes are going to break in right so the more distributed our water uh storage is that the better chance we have of maintaining so that's another key component to the plan is moving away from the big tank to the multiple storage tanks and that's a really important piece of the work we're doing okay all right thank you appreciate that all right other questions john brown so um quit you're so i see in here somebody's recommending nine percent increase your water range correct i believe that's the that's correct yes okay that's correct so when you tagged

2:26:50 on the three dollar a month uh increase for my water watershed recovery that's ten percent for me so is that ten percent plus nine percent so my rates are going up 19 okay i just need to understand the math okay all right okay um that's going to be hard for me to swallow but if that's what it is that's what it is not for me personally but blowing been through rate increases before 19 is pretty big um so uh now tyler got a question for you substations replacement i saw four uh in thurston up up the river and don't we only have 2 300 customers up there

2:27:35 right if you if you can go back to that so i don't know what number it is but i can walk through which ones those are i just counted them quickly i'm just thinking yeah one of them is uh walterville it's actually more of a conversion decommissioning if you will putting the generator off onto the distribution system instead of a transformer getting getting out of the 69 kv one of those is the the ip plant i discussed one of them is thurston that's a reconfiguration you use bpas lines instead of ours you get out of the 69 kv then the other one's the hayden bridge plant okay and uh not all of them customer feeding substations i guess okay and i'm

2:28:20 also a lane electric customer and three percent of the distribution lights are already underground and they're spending five million dollars this year underground as a percentage of their total budget what are we spending on undergrounding for this in these in these plans well that number off the top of my head but you know we are doing that for residences up there getting rebuilt right now and then we have fema projects that are getting funded in the southeastern south hills where we could do some wildfire mitigation risk and you know if you haven't lived through ice or snow storm you know what i mean but do we have any plans on increasing that budget to underground lines because i look at the percentage of what lane electric is doing

2:29:05 and they got half their lines underground already they're spending millions more a year than we are on underground i was wondering if that's something that we need to talk about in a long-term plan about 50 of our lines are underground right now but to do a significant amount i mean you're ducking 50 70 million dollars to i yeah i understand the math but i'm just thinking about ramping it up especially in the high risk areas in south south eugene absolutely and so the wildfire mitigation planning effort um first we're working on and we'll we'll be coming to talk more about this yeah okay and my last question is i if i lived a building because i was here when we built this building and you're talking about upgrading a seismic i thought we were already seismic three are you going to change this

2:29:50 to essential service or you have what's the seismic upgrades to the rock because we just built this thing when there's they haven't changed the seismic code since then well in a nutshell i believe the seismic for this building is set up so you can get out but you don't get back in so we're going to essential service so kind of like a police station and a hospital okay i just want i just went back back in okay yeah so so it functions after an earthquake rather than just survive it so it can come back in and operate so that's when you're going to okay essential service is a is a big upgrade that police fire and hospitals are built to it's a totally different standard than buildings they only not only survive with earthquake but

2:30:35 they have to be functional doors still have to open electric head has to work it's another cost and if we're doing that great i just didn't know that i thought maybe we hadn't built it to the right standard so thanks for the clarification that's that's what it is thank you all right thank you that's all i got well first in it i'm just going to comment we do have a project that three four weeks ago just got um approved by fema for for the 2016 storm to do an underground conversion in the south engine area so we'll be putting that in our quarterly report but that's one that's in the plan yeah i'd kind of like to know how much money we're spending a year on underground just to kind of see how we pair with other utilities thank you yeah you know i wasn't going to dive into seismic stuff but commissioner brown opened the door uh it

2:31:22 surprises me that this building was not built to a higher size for standard life safety like a little this little gobsmacked that this most essential facility for the entire utility was built to lower standard i'm glad we're retrofitting it i know retrofitting it way more expensive than building it to a higher standard on the front end is it possible that we propose a board the board propose a policy that any new buildings be built to that higher standard unless there's a reason to build it to a lower standard it seems like every facility we build 90 of the facilities we build should be built to that higher standard

2:32:07 can i comment to that yeah go ahead i was going to comment but go ahead well i think the reason this wasn't built to seismic three to essential service standards because uh the facilities at the admin headquarters building were there everything there nothing here was essential this is more of an admin function in engineering rather than nothing like you know something that an essential service everything has been moved over here and that when this was built this was this was designed and constructed for 650 people then we're going to have this and that and we have consolidated constricted and now everybody's here and we don't need the headquarters building in the world and so that's changed the function of this is that not correct i really don't know why it wasn't built originally

2:32:52 this way we locked 30 million bucks the 70 million was that was the budget we promised and the first bid was 110 and we had to cut off green roofs and concrete driveways and it was it was a bloodbath cutting things that got cut i would rather come on comment on your proposed go forward i i don't think it's just limited to buildings i i think we have a strategy to become more resilient and part of that would be to apply the appropriate seismic standards to to buildings to transformer foundations to pump stations to whatever i think that's a a very good policy move going forward and should be part of

2:33:37 what we put into our designs and and scoping criteria i think that's an absolute essential i i think looking at resiliency going forward involves those three areas that that rod price mentioned which is hardening which is one one of those areas seems like it's a natural fit so i don't know exactly all the history but for this building but i think going forward and and even with this building we look at the functionality of what we need to do and say yeah that's a requirement we're gonna we're gonna have to bite the bullet and do that would it be useful if that was a board adopting policy would that make it easy i mean then it goes into the calculation for any time we're doing a new building that's not something that we right

2:34:23 that's baked into the cake yeah let me look at the best mechanism for that sometimes that can be through a policy sometimes you know we i don't know that we actually have a resiliency policy um that might be something worth exploring in association with with our strategic plan i mean we have a climate change policy maybe we have a resiliency so that's something that i'll look at just to be clear though this building is safe it's life safe okay yes i don't want to give the impression that it's not a safe building so yeah can you make one quick comment on that the same point yeah

2:35:08 on the resiliency point i would also say it's not just the seismic as we've seen in the the heat wave we need to start looking at what kind of equipment and materials we have that are vulnerable to higher temperatures and i don't know what what we had but you know we're looking at north and they were experiencing major heat i know that there's certain you know there may be certain tolerances that were fine in the past that are no longer fine so as we look at that resilient spine and equipment and moving forward we need to add that into the calculation thank you all right john okay um a few things uh

2:35:56 i'm redoing the ip generation plan when is our contract with that i mean i don't want to go and rewire their their generator and then have them say we don't want to sell you power anymore like we had happened up north off the top of my head i thought it was 20 20. 24 24. so there's a couple components to that though commissioner one is they're a very large customer they're very large consumer and it's not so it's not just for generation it's also the fact that they're a very large consumer of electricity from us the investment that we make there um and and that was part of the hesitancy

2:36:42 a few years ago was you know is is ip going to remain strong and healthy and in business and when we end up with stranded assets we do feel like they're a healthy organization and we would also invest in a substation with standardized equipment so that if for some reason something happened with that contract or with ip as an organization those would not those would be assets we could use elsewhere in the system so that would be part of the design part of that capital project was re rewinding their generator right they stopped making black liquor we've got a generator that we can't run right so yeah that's correct okay i just need to know if

2:37:28 that contract goes away in 2024 and we're rebuilding their generator in 2025 and they're not going to sell us the power just a little bit more um two tanks we just decided we were going to do two tanks at patterson now we've learned from that are we going to do two tanks simultaneously and all these sites because the the timeline you showed showed them spacing out you're basically two tanks um same site same time okay there there is a bit of stagger at hawkins i think we have to build one and then we take that it's such a large reservoir to take out a service we have

2:38:14 to get the one end of service first just let's let's learn from our from our past experience and make sure that we have that going forward um hillyard street water main is in conjunction with patterson substation what's the time what what date are we looking at on that uh we're timing that again with the city's rebuilding of hilliard street and i think that's in the winter of 22-23 about a year and a half from now okay so about the same time that all the dump trucks are going to be coming down that road yeah we've already discovered the timing of that and um you know i just made a i just made a declaration at the beginning of this

2:38:59 meeting that that if you don't like my decisions you can vote me out and it looks like those trucks and that construction is going to be happening right about the time that my re-election campaign would be starting so i make sure that that's done correctly the election aside we also want to make sure that we we don't rebuild something uh have a nice new road and a few years later have to have it i understand that but there there are ways to do you know i've been involved with with eweb and the coordination with the city on these things for the last 15 years with a different committee that i'm on and we've had projects that have been doing well and we've had projects that

2:39:44 have been done not well and and ones that so let's make sure that this one we coordinate to it into it as as good as we can and then and then the last thing that i want to i want to say is you know you brought up the the comparison between the 59 cadillac and the new ford pickup truck okay well i've got both those vehicles right i've got the 66 toronto i have a 64-fold pickup as well and i have a newer suv okay i just put a starter into the tornado and it was 66 dollars put a starter into the suv and it was 600 so there's certain technologies that just because they're new doesn't mean

2:40:29 they're better and and in this industry something that was designed in 1910 may work just as well as one that is designed in 2021 the one in 2021 has a lot of bells and whistles that can break and technology that goes out of date over time so just saying that it's a 59 cadillac doesn't necessarily mean that that is an obsolete technology yeah i didn't know it's not perfect but i would argue too that we're having a lot of trouble finding replacement parts it's taking a long time to get some uh we're buying relays and things that we can't and we're stockpiling stuff now that you can't even buy so it holds uh in electrical terms too

2:41:15 stuff does break down and so you know i think a better question is the kind replacement the stuff's really not that complicated but it's if you leave it there long enough it's going to break down and as commissioner carlson pointed out he will kill you and we will start popping stuff so that's it like i said it wasn't a perfect analogy but yeah he got me halfway there thank you all right i just have one question and it's about the second source um what is the like what's the plan to make the plan what is the timeline how will we go about that process because i see that

2:42:00 design permit is starting in late 2020 so how will we get there if you want to answer that you want me to answer oh i can start well we're currently working on a couple fronts we're working with the springfield utility board um the whole property acquisition and and um rights and easements for our transmission water pipeline so that should be wrapped up here in that will be optimistic frank month and absolutely then um i think the next steps are we still have um some land use decisions to work through with the city of springfield

2:42:45 we've had a couple of positive i'd say positive meetings with them so far this year and that'll take some additional discussions with the city of springfield to get those um solidified they were receptive to our plans i believe in our first two discussions with it's a different so those are the next steps i think and then once we get that they would be uh re-kicking off the um we've completed a preliminary design we have an investment in there um we could do a short kind of check because everything all the

2:43:31 the financial capacity is there you know is everything still hold on that as far as the [Music] criteria for the plant is as far as the level of service goals you know you really want to need to start your home's capacity in that and it's a matter of uh starting the memorial design and permitting process those are the next steps of city springfield and then kick off more of the confirmation of the past work and then getting on some next phases of design i would i would elaborate just a little bit president schlossberg there are a number

2:44:17 of issues that came up in in the previous discussions around us a second source having to do with land use issues and we're trying to get some direction around those land use issues as well i mentioned with the city of springfield in particular and springfield utility board as an option those being kind of critical path we can simultaneously start to have discussions with the board around the scope of the project and how it would operate and what kinds of specifications that we would want to have for that plan simultaneously to that we're trying to get those land use issues resolved at least a direction and some sort of affirmative movement by the end of this year

2:45:03 so that we can spend quite a bit of time next year doing scoping and working with the board on what this plant is simultaneously there's also potential opportunity through infrastructure plans and other other spending that potentially might be available federally to look at some financing options i think that's an important sidebar but at this point we wanted to put the financial uh number in the plan knowing that there's a number of different steps so over the next year and a half or so to go through so maybe beginning of the january-ish we'll get more into that yeah between now and then we'll definitely get into the some of the scoping yeah and also

2:45:48 get you know provide the board with updates on where some of the land use issues are with the city of springfield and now in the final phase the home stretch this is the easy part this is just the dollars and cents part so i guess we'll turn it over to you debra thank you last couple of slides here uh for the record uh deborah hart the chief financial officer adam rowe the fiscal services supervisor is here with me this evening i'm going to let him do most of the talking and then we also have alicia voorhees

2:46:34 and then sanchez available on teams for other questions but what adam and his team have really done is taken the strategic and operational guidance that frank talked about at the front of this presentation which was a little while ago and then taken that along with the investment uh plans that tyler and wally have talked about and they have a snapshot in time of what 10 what our 10-year plan would look like and we do monitor that plan continuously and then of course annually we have an opportunity to revisit with the board uh all of those assumptions that go into that plan but with that i'm gonna turn it over to adam

2:47:20 thanks debra thanks for that and i will uh some further slides touched on the constraints and assumptions driving the financial plan i'll have done a couple of those and then on the slide is the results of the plan so first of all we talked a little bit about the two percent uh non-labor speculation that was included we also do have a process internally where baseline or service level needs then those can get submitted to the executive team for review so some an example of that might be if uh like fuel costs are increasing beyond the inflation level the person managing those costs i can bring those and get those approved and included in the financial plan

2:48:05 uh something and that would be like a baseline cost increase of something outside the control of the group and that service level will be something along the lines of if we want to do additional tree trimming or something service enhancement practices so there is a process to incorporate those last year when we came up with the sales and revenue assumptions for both utilities have we used relatively conservative assumptions entering into the pandemic stay-at-home orders and weren't sure what the financial impact would be as frank mentioned for the water utility we tracked pretty close to pre-pandemics uh levels so we've gone back to the normal conservatives or relatively

2:48:52 conservative assumption we've we historically used 95 percent of the five-year average for the water utility for sales and revenue forecasts and that's really where we hold all the conservatives and everything else we try to just use our best guess and cost i wanted to also highlight that we have although we haven't had a rate increase since uh 2016 for the residential water customers in 2017 for commercial customers we do have projected rate increases um in the plan as mentioned earlier 2020 starting next year in 2022 with a nine percent rate increase for the next several years those increases support the second source treatment plan

2:49:37 those also lead to a higher than the rate trajectory that frank mentioned earlier in the plan of cpi um but if you exclude the impact of that one project we project just over 30 percent which was within that range so that really is driving that feel there um the financial metrics are in the top part of this chart you can see within target throughout the plan although the second half of the plan we do have um we do approach the debt service coverage that's largely a function of the bond influences in 2025 and 2028 assumed in the plan uh to fund

2:50:23 the capital program largely with us treatment um the uh if you'll as you'll see in a couple of slides later when we show that bill comparison there's a bit of bedroom and the rate trajectory uh potentially you'll see the impact of that but that's the results for the water utility nice live case thank you so the electric utility also last year had a reduced sales and revenue assumption uh this we did see a reduced demand and then we also had the loss of a large industrial customer at the beginning of the recession last

2:51:09 year and that had been announced prior to the pandemic so the demand is reduced a bit below trend and gets back to three recession levels in the next couple years uh the electric utility also has not had a change in the overall revenue requirement or rate increase since 2016 but we do show price adjustments starting as soon as later this year actually with the bongo pass through we as you'll see in the great trajectory every other year we have an assumed bonneville rate increase of about two and a half percent for e-web customers and that's a function of

2:51:54 an assumption we use for bonneville cost increasing every other year at six percent the last couple great adjustments have been below that and we're anticipating later this year to be below that but whatever the rate adjustments with um that bonneville that we see from bonneville is directly passed through to uweb customers so this presumably will be lower than six percent and the u.s great increase would be lower than three and a half percent we also have uh general rate increases the next several years uh starting next year at one 175 included in the financial plan to fund the capital expenditure that was discussed earlier we have a drawdown of the rate stabilization fund of roughly 20 million dollars as well as

2:52:40 bond influences in 2023 2026 and 2029 um and this that compound growth rate on the overall rating rate changes are within the cpi metric mentioned earlier in the presentation next slide please so here's the bill comparator slide it's a bit different than we've shown in the past the electric utility is consistent with the way we typically have displayed it and we're in the same position as the seventh lowest among our comparator or 17 comparators on the slide for the water utility though to incorporate the impact of the second source

2:53:26 treatment plant we projected out to 2031 so we used the trajectory without second source for eweb and then applied cpi for the comparators to come up with that relative comparison you can see that as eweb in the same spot we've been in recent years since the second lowest among the comparators on the chart and that's projected out in 2031. if you go over a few bars there's another u web line that's colored green and blue and you can see the impact of the second source treatment plan so with all of those rate increases projected throughout the plan to support that you can see that has us moving from second lowest to fourth lowest

2:54:11 among the curves and for discussion number three um your questions or discussion of the long-term financial plans and the associated revenue impacts all right i'll go first [Music] and percent increase in water uh being driven a lot of that sounded like was being driven by second source if for frank mentioned that there may be

2:54:58 uh some federal funding that might come help offset that with that offset than the nine percent increase if we got that any opportunity to secure um grant or federal funding could be used to offset those increases yes um 19 million dollars from or 20 million dollars from rate stabilization funds what how much of a percentage does that that bring that if we throw 20 million dollars at it how much less do we have to raise our rates percentage-wise i mean is it a 2 that that offsets is it 1.5 just ball parking

2:55:48 each percentage point of a rate increases um about 1.8 million uh in revenue so we're not spending 20 million now that's 300 000. the 19 million is coming out of electric but yes you are correct it is something that could come back in a memo that would that would be that would and then um the last thing that i just want to bring up uh and it's kind of with this and it's something that uh commissioner brown alluded to earlier about um using local stuff when we can and i don't know where this if this is the appropriate place to bring that up but um i know that before

2:56:33 i got on the board there was a there was direction to take some of our reserve monies and put it into a local bank rather than a national bank or a or a bigger regional bank and i'm just wondering is there another opportunity for us to do that with some more of our reserves and where and when would that be appropriate to bring that up and see if that's something that reporter would like to do just just the question throwing that out there i just saw that you know we're talking about reserves here and i just i think that that's a good thing i've talked to talk to the bank that we did that with and they're super appreciative of men have put that money to work back into our community so if there's any opportunity for us to do more of that i would i would like to see that as going forward i think that would be a

2:57:19 follow-up commissioner there are some limits to what we can do relative to investments so you know we'll follow up on that particular topic on the issue of drawing down rate stabilization funds those we do have board policy guidelines as to minimums for those and as you remember i think it was april or may we talked about reserve balances and where those are and so we can follow up on that as well and thank you frank and it was some time ago um that funds were actually deposited to the rate stabilization fund with the intent by the then board that we would use it to defer or offset future borrowings

2:58:04 all of course maintaining a target yes john brown so heaven raised rates once for second source and then backtracked and reduced rates because we got ahead of ourselves i want to make sure that if we're going to propose substantial i mean nine percent before we even talk about the water recovery is one of the biggest great increases i've ever been involved with medicare and i know how the people react to that but i want to make sure that you were very comfortable about us getting approval in springfield you said land use is going well that's good to hear have we gotten permission from the railroad to go underneath the rail line yet we started that discussion

2:58:53 not specific to that railroad okay because i just want to make sure that if we're going to raise rates we've done it before and then we had to roll back and give the money back that we're okay with this that we're confident that we're going to move forward in spending this money because i know that it's hard to raise rates and roll back and enroll again and i just want to make sure that you guys are comfortable that we're gonna i'm going to proceed i know we need it and that last delay cost is 20 million bucks it looks like and we'll make sure that uh stuff done right well there are a number of boxes we want to check before we actually say yeah we're going to ask for this kind of a rate increase um while we're sitting here there's a couple that's that's why this process

2:59:39 is valuable to us um these are the these are the assumptions that we want to make these are the projects we think are important we recognize there's some boxes to check between now and when we actually do a budget which is approved in december and some of those will be around the degree of certainty associated with where we are and how comfortable is the board with the scope of this project and some other things so there's the this is i think i said this this is not a one and done there are other things that we need to do to make sure the board's comfortable with this thank you sonia

3:00:24 um okay looking at the the water and the electric long-term financial plans i see a lot of yellow in there where we're not meeting our debt service coverage ratios and that i mean that typically means that we have challenges with borrowing and when we have a number of these and correct me if i'm wrong but i think that's what it means that that can get into a sticky place for us um and can challenge what how we how we're able to borrow is that not correct that's that's actually not correct commissioner carlson the yellow actually indicates that we are approaching we have we have not gonna gone under our metric we're just within um 10 of the metric it's just that's why

3:01:09 it's yellow if you saw a red that means we would be outside of our our financial metric that would limit future borrowing okay so our target is above our our actual target is above where that danger zone is that's good yeah we are achieving our targets um the yellow still means we're achieving our targets okay got it thank you um appreciate that clarification and then the the nine percent and talking about the second source i mean i i still i have some other questions there around you know ours is some of that 20 million dollars when this gets revisited is that due to current inflationary

3:01:57 changes that we've seen that i mean you know anybody's crystal ball who knows what's going to be the long-term impact if prices are going to skyrocket and then stay there or if they're going to have this big bubble while we're having supply chain challenges with covid and then at some point we get out of that is some of that major increase due to the current covid situation or is that just kind of a long-term trend that we're seeing or different regulatory changes the 20 million in inflationary cost for second source was based on actual construction cost indexes from 2014-15 to 2020 and then a three percent assumption on

3:02:44 increase in inflation to the 25 26 27 time frame okay so that is smoothed out over a longer period to not necessarily incorporate this okay that that's helpful for me to understand um you know i mean typic i've been in a situation i've been very fortunate for the last four years you know except for the beginning of this year we haven't had to raise rates we've done a lot of work internally and i understand that that can't we can't always do that we're starting to see that with the red indicators of you know we're falling behind on some of these other investments and our infrastructure needs upgrading but these are these are big big

3:03:32 impacts year after year after year so i just want to make sure that we are really doing the due diligence there to make sure that that that that is necessary that's that's a tough pill to swallow right there sure thanks i'm trying to be quick um i appreciate the approach of smoothing our rate um increases uh over several years and then the buttoning effort now is to do that over several years and i think that's helpful and maybe i missed why we're not haven't been able to do that

3:04:18 on the water side where we've had several years of new yeah just be interested and i'll just reiterate you know the same approach on the water side makes all kinds of sense to me yeah um that's that's absolutely absolutely right so if you look at the water utility and if if you took up the second source what we've done is we've gone multiple years without a rate increase and projecting now we would basically be inflating rates at the rate of inflation which seems like it's a pretty natural

3:05:04 thing what drives the early year nine percent are the fact that we now have a very specific strategic very large investment that we've added in in the mid-2020s so your logic makes absolutely sense that we would have a very smooth inflationary rate increase on the water side after multiple years of not and it would basically run pretty consistent with inflation the reason it is front loaded is that that 90 million occurs in the middle of this period and so you start to run into you know we've tried to look at and say well instead of nine percent in the early years what would it be if it was five and a half all of them instead of

3:05:49 four and uh we push up against the financial metrics in the mid-2020s when we're actually making those investments so what you said makes absolutely sense that makes absolute sense what drives this a little bit differently is we now have a very large strategic project which i think makes a lot of sense but there's a lot of boxes to check obviously for the board and that makes sense to me as well i but and we saw this expense coming at some level i mean it's it's not the second source has been a discussion for a long time so it's a little surprised that we didn't see that and start raising rates a couple of years ago in anticipation but

3:06:34 you know it's calm water under the bridge at this point oh my gosh it did not intend out of square but yeah for future such expenses i think the more we can anticipate those and try to moderate that increasing i think the only saving grace is that our water is so affordable right now that even a 10 increase is still crazy affordable water um but i do think we're gonna i think we better be prepared for how we're gonna address this conversation in the public you looking to go out and reach at coburg and crestwell and they're 100 bucks right now we're you're correct in the sense of how this is positioned

3:07:19 i think is important a lot like we did with the what with the um the recovery fund around the watershed it was a very specific purpose i think people could understand it i also think people will understand the importance of having a second source and especially when you have 200 000 people and probably the largest community on the west coast with only a consortium is that vulnerable now i absolutely agree there there have been some starts and stops with the project and what we're recognizing now is that we really think that this is the time that as a utility we need to make this

3:08:04 investment and we have the head room to do it we're the lowest price retail water utility in the northwest the only one that's lower right now is medford and they're mostly a wholesale version even after the investment we're fourth from lowest relative to all of our comparators so there is head room to do this if the board wants to choose to do this and that's really what we're presenting yeah and i certainly don't question the need or the benefit of me thanks just one question i feel like i've asked this question before when we talked about some of these assumptions but um if we're going to be raising rates in

3:08:51 both electricity and water we have a number of customers that rely on us for financial assistance and so are we raising the budget for that as well so i mentioned that kind of in the very beginning the way that our ecc funds are developed is to target a certain set of customers so it's to help with basically their fixed charges for a certain percentage of our residential customers and so as as that gets strained that does become adjusted by inflation and need as we go forward it doesn't tend to expand a lot or

3:09:36 contract a lot just based on how those metrics are set up but it does adjust and for example we moved we moved from 240 to 200 and 200 to 260. 200 to 260 over the last year or so because of that sort of philosophy that we're trying to accomplish so it will adjust that is all that i have so just just to be clear one question so we've got a big capital project in water and 70 million or 90 million capital project over the next 10 years and that equates to nine percent for the first few years if that were on the electric side and

3:10:23 where we've got 400 million a year budget it would probably be one or two percent it's just that the the revenue coming into water is so much smaller that's why a price increase to cover a 70 million dollar thing is nine percent as opposed to carmen smith you didn't have a nine percent increase in electric to do carbon which was uh equivalent or higher you know so it's just that there's a scale factor right okay thank you so i just have a couple things to finish up and then we can move on if you want me to so next slide please um

3:11:09 yeah this this is just to kind of how i tried to characterize exactly what kind of where this discussion went at the end and that's that the water and the electric utility to commissioners points are in different positions there are different financial positions they're also in different strategic positions what we have done based on your concurrence earlier we have met all of those strategic all of the strategic and operational guidance we've coalesced on the various business assumptions with some feedback we presented

3:11:56 a capital investment plan totally a little over three quarters of a billion dollars that actually scales pretty well when you consider that we already have 1.2 billion in service and the replacement cost is significantly higher than the original cost so i can we'll go through all those numbers but it does sort of fit within the scale of what i would consider reasonable when you're talking about that kind of asset base and we've done this within the guidance that you also provided which both the electric and the water utility can do this by using rate increases that roughly track with inflation the exception to that is the the very strategic um second water source we recognize there's some boxes to check and things

3:12:43 the board will want to qualify and we'll want to qualify there as well but we feel like this is a pretty good approach going forward given that we've met all the objectives and now we have an opportunity to evaluate really and get into the meat of the discussion around the second source and what that's going to be so that's and you take that out and water is within the scope that we talked about relatively close to inflation at this point do we miss anything that's that's kind of the question we've kind of tried to kind of learn our usual understanding around strategy and assumptions we've presented an investment plan the outcomes and we really are in a position now where we'll take your advice and go forward

3:13:30 and start to develop budgets pricing plans second source plans and some other things that suggestions that we've received so at this point just any other guidance or suggestions or changes that we should make well for me we haven't picked all the boxes because we haven't talked about walterville and to me that's capital investment plan i mean it's 20 to 100 million dollars so you know when you said we've checked all the boxes from for 20 21 to 2031. no we haven't checked all the boxes so we've checked a lot of the boxes and we've done a lot of the strategic things that are

3:14:16 important but let's say that we've checked all the boxes i can't i can't concur with that that you're going to come back to that and we're going to have that discussion but but to say you check all the boxes in my mind that's not i would the counterpoint that i would make is that we have we have achieved the the tactical response to lieberger multiple through this decade if there is a long-term investment associated with leeburg and walterville it will be more than likely associated with either the deep commissioning or the re-licensing of the facility which is 2040. so i'm not actually sure when that

3:15:02 decision would be made the open item which i absolutely agree with is are the assumptions that we've made around the tactical response to water management um enough that's that's the piece um that that i concur with and those there's further information happening including next month so we'll continue that conversation the other thing i would ask about is um just what kind of uh capacity we have for other cars unexpected expenses um you know we have a number of really

3:15:48 big projects that are uh bringing in austin and you know hopefully we see them all but you know i don't know how long ago it was that somebody said oh geez we got a leak here in boulderville and you know within a few years we realized that we had this tens of millions of dollars expense i just wonder if there are if there are other unexpected expenses like that what kind of condition are we to address them are we here have enough of a cushion you feel like i think that's that and commissioner barofsky's feedback are things that we can give the built board we also have dials that we can form within the risk-based projects that we

3:16:34 have on both water and electric those are necessarily not time critical that if you move if you have a new lump in the oatmeal that comes over here you can bring in and rearrange projects accordingly as well as look at the financial tools that we have available i think that gets to commissioner borofsky's question over not quite understanding and checking all the boxes with things like a leeburg and a walter go and then hey what else is what else can come up and so those are the but we speak of resiliency we don't just speak of infrastructure we speak of financial resiliency and workforce resiliency and i think those are valid and trying to provide more context

3:17:21 both the plans the compulsory works about 25 of the budget so that should give you some idea of how much there is to work with and when you have to fix something you have to fix something and so you always have to make those choices yeah but yeah i worry about no idea how much i worry about that can you imagine you i'm sure there's stuff that haunts you that i don't want to know about nobody in this room worries about something i'm pretty sure god worries about more than most of us uh two quick things one um i mean i i agree with the trajectory if we're saying we're not checking the

3:18:06 boxes i mean obviously we mentioned earlier that we want more information on kind of the secondary source and what that looks like so if we're including that and not checking the boxes then that piece needs to go in there too otherwise the trajectory and kind of where we're going i mean we're going to get more of this information over time this isn't the this is one of many looks at this it seems before we actually vote on anything so um that's the other and then the other piece i wanted to make sure is just lee berg is the is the damn it is the plant that has the leak now together both of those infrastructures are older and aging and you know provide minimal amount of uh power so to that extent lee berg is the

3:18:51 one that to my mind needs more attention urge you know in in a more uh in a sooner manner here goodness it's 9 30 because we're gonna wrap this up soon um so you know for me leeburg is the is the main one but anyway that's what i have all right um i'm good too it's late i guess my only my only little tiny thing and this is a process thing is that um these are really big important decisions that we're making and feedback that we're giving you and this meeting is really long so

3:19:36 um not to sound like a broken record but i'm an advocate for work sessions or something where we can get some of the work done at a different time because i feel like by the end of the night i don't want to speak for everybody else but i'm really tired and my brain gets kind of fried so um so when go ahead i was just going to say i think i really like the process that you had here going you know it's like here's the issues that i really want direction from the the board on a b c

3:20:21 and then i was being able to dig into those and say yes this is you're going the right path but we want more information on this so i was really pleased with the way that this meeting went it was long um but i think we covered a lot of really important topics and gave staff direction to move forward like like with so you said we do have more bites at the apple but the apple has a couple bites taken out of it now right by giving you guys this direction that's what i'm seeing and you know we may say well let's cut off half of that apple and and do it a little bit different and corner it or whatever but i really like the way that the meeting was set up

3:21:07 specific questions being asked of the board not just what's your fee and what's your feedback because that's difficult for me to say here's my feedback when i have a powerpoint it's like is this right is this wrong so i appreciate the way it was put forward thank you your actual next vote on this will be in december so there's a number of opportunities to have further discussions whether those are work sessions or regular sessions they'll be a lot longer agenda check um president schlossberg i know that jason is probably in his trailer but i will i will tell you that his trailers is on his office just

3:21:53 so you you know i um his um information is is not requiring action from the board if you wanted to wait until next month um i'm sure he would understand i feel bad for making them sit through the whole meeting though to do it again next month put them at the beginning of i'm hanging tough it's been a interesting uh discussion tonight i enjoyed it is it is this like jury duty i thought i didn't have to come back yeah we'll pay you accordingly

3:22:41 thanks jason it sounds like you've uh thought um postponed there's a moratorium on jason until next month thank you sorry jason thank you jason okay so we are gonna try to whiz through here with um item number eleven correspondence there was only one piece of correspondence thank the board you can reach out if you have any further questions on the enterprise risk management assessment that we go through be happy to answer those in our 101s if necessary and then just the future board agenda is the only thing i'll mention that that we our plan is to meet in person

3:23:27 next month at the headquarters site so um be open to the public although i think we will also have some virtualness to it as well we're looking at that but that's since the governor lifted her order it's an opportunity and maybe even a requirement for us to provide public access to meetings in person more about how we're going to do that as we get closer i'm just a quick reminder i'm not going to be at the meeting next month so thank you commissioner first meeting

3:24:13 right now yeah that's the first one ever i am i think we have in our notes that you will not be in attendance uh prius free used absence next month and then commissioner barofsky will be missing the september meeting so those are the two that we have notes on all right we are at the very end with board wrap up is there anyone that wants to say anything at this point i actually have a couple questions on the agenda stuff if i may um and i hope we'll load a whole bunch of really valuable decisions in the next month while sonia is out um sorry it is late

3:25:01 it's all glass um i i don't well one i'm excited to hear about the electrification plan i'm excited to see that on the agenda um i'm also i don't see the wildfire mitigation coming back to us is that something that we'll see or will that just get wrapped up and we'll see that again okay it's not on great thank you and then the question i have is a little bit logistical about meetings uh i know for me being able to see these meetings um these are all recorded right and they

3:25:46 archived on the website right um are we planning to now make that a practice where we video record meetings and keep them archived is that those are things we're discussing okay but it's it's likely that we will do something i for one think that'd be really valuable for people who are trying to understand our decision making processes i think you know following that that pattern would be really beneficial that's all i have thanks um back on the the board wrap up uh last month or this last month's meeting for the lane council of governments we received a report on the

3:26:34 the wix the underground infrastructure where we share our dark fiber and i wanted to find out if that might be something that other commissioners were interested in getting feedback from that group um and or getting a report from elcog on kind of the services that they offer brenda was is the executive director and is willing to come and kind of do a talk about that or have staff come and share some information on the the licks and the project and where it's at i know it was a pretty significant investment that eweb made an intergovernmental agreement with the city of eugene and elkhart to help get that going and given that we have some new board members i wondered if that might be something that people are interested in having

3:27:26 maybe not most excitement at 9 30 at night when we have all these other topics that we're tackling and running long meetings but um if there are head nods then um i can you know help connect or we could help connect get that going it's always good to know what's going on i see maybe a one maybe maybe not then okay i oh um also anything uh any updates on the i'm i'm interested in the hydrogen project and any kind of updates or things like that if you can send a memo out that would be really good i'd like to

3:28:11 keep in the loop on that i think it's an exciting project and uh direction that i hope we will be pursuing more in the all right well thank you everybody for a great reading and um it's really nice to be with you unmasked actually appreciating that so this meeting is now a journey