EWEB Board of Commissioners — June 3, 2025

0:04 Welcome to the June 3rd Eugene Water and Electric Board board meeting. My name is John Broski. I am board president today. We'll start off our meeting with an agenda check. Look around the room and see if anybody has any additions, actions, or amendments to the agenda. Um the only thing that I'll mention is on item number number nine, the billing and collection. We've scheduled 60 minutes for that. With some of the things that have have taken place since this agenda went out, I don't think that we'll be using the full 60 minutes on that. We'll still keep it on the agenda, but just for

0:50 people who might be looking at uh coordinating their timing as far as what they need to do, I just wanted to put that out there that that agenda item may be a little quicker than 60 minutes. Um, all right. After that, we'll move on to items from board members and the assistant general managers. Start with Tim. Sonia, I just wanted to thank staff and all those involved in the up river meeting. I thought it was very well um put together and um created much better conversations than other um formats we've had in the past. So, I just wanted to appreciate that. Thanks for all. Great. Uh Commissioner Brown. And I don't have anything else.

1:37 Uh just kind of talking to what Sonia just said, we will have an opportunity later in the meeting to just kind of do a brief discussion of how that went. So at I'll save my comments for that time, but I also concur. All right. Next is correspondence questions and comments on the correspondence that were attached in our agenda item. That would be the legislative updates, the reserves. Any questions from the commissioners? Okay. I have a couple that I'd like to put out there in in regards to the reserves. Um, there was a couple of things that jumped out at me that I just wanted clarification on. The first one was

2:23 there was a placeholder for the emergency regulatory fund of $5 million. I know that that's not in this agenda item coming up, but I was wondering if you could just kind of speak to that. Give us just a little bit of an idea what you think that might be used for, how it would be used, and how it would be funded. So, we continue to with respect to funding, we're working it into the long-term financial plan and intend to show you all a gradual increase of that fund. And that would be available for emergent regulatory issues uh that may come up at some point in the future to

3:08 help mitigate a single year's impact from an expense resulting from a regulatory issue. Do you think that that type of a a dollar amount or or uh fee would have an impact on rates or would it be something that we could gather internally from other reserve funds? Well, we'll look to build it over time so that it doesn't have a single year large rate impact. Okay, great. and look for opportunities too if working cash is higher than we expected other sources as well. Okay. Um then the second question I had was on the transfer from the water department

3:54 from uh rate stabilization to capital. There was a footnote in there that said that the rate stabilization fund is used to offset some of the debt service ratio. Could you just talk to if if that would have an effect on that and if that's the highest and best use of that or would it be better to use working capital or another way to get that money without having a I mean is it if that debt ratio has changed does that increase our costs when we go out to borrow or existing debt that we have looking for footnotes so the rate stabilization fund when we when we transferred money into it. Uh it uh we

4:41 have been modeling it to we have been modeling spending that for capital to help reduce our borrowing need uh in a single year. It does improve our um our debt coverage. Okay. So yeah, I guess the the question that I would have looking forward is so it says here in rate stabilization fund up above it says uh funds have been modified as the future source for capital projects and long-term financial plan and will help reduce further borrowing. That's great. That's what we want. Um per policy that where was it? Anyways, I just wanted to make sure that um you know, if we're borrowing Peter to

5:27 pay Paul and Paul is a long-term debt solution that we're going to have to go out and borrow something at a higher debt because we've got we've lowered that money that we're kind of backing that debt with. We'll we continue to make sure that we maintain uh the financial metrics that keep us at this rating. Great. Okay, that's that. And then the last one was just the the idea of using working cash as opposed to reserves. And I think that that's something that we can look at in the future if the working cash keeps being as above our benchmarks as much as it is the highest and best use of working cash. Whether that's borrowing down, putting it into

6:13 rate stabilization or whatever. I just like to have that thing. And it it appears that this will be coming before us next month for an action item. Is that correct? Yes, it will be um based on direction here this evening. It'll come on consent calendar if that works for you all. Okay. All right. Well, that is all that I have on correspondence. Anybody else have any other comments or questions? Nothing on the legislative affairs. Not really. Oh, I was hoping to gonna take care of that. Um, well, okay. Is Jason on the line?

6:59 Hi, Jason. The only thing that that really piqued mine was the the flag that you said that capp and trade might be making a comeback. Can you talk to that? Yeah. Um, good evening everyone. Um, I'm Jason Huser, the public policy and government affairs director at EW Webb. For those that don't know me, u, yeah, it is one of those things nobody had on their bingo card, as I said in the the memo. That's the only metaphor that that is fitting here. Um, it's a shocker. Um, it is um, in part driven by potential tie-in um to a state revenue crisis. Um, as you know, carbon pricing um does produce revenue through the sale of carbon allowances. Um, the way that that um money is um recycled uh which is a

7:46 form of reinvestment um back to the people it's collected from is very crucial. Um uh there's some ways um that could be done though that could help uh address the state's deficit or uh shortfall in funds to pay for wildfire suppression as well as u maintaining and modernizing the transportation system. And I I I can tell you this, I've seen one draft um of the capp trade proposal. It has no real information about what's going to be done with the revenue. So we're very short on details um but uh we are already starting to get involved with some stakeholders that are being brought into the conversation folks that have uh subject matter expertise in the electric sector. Um as you some of you

8:32 may recall EOB was very involved as a technical resource u in sort of an advisory role um for capp trade in bills in 2019 and 20 and I I really don't know what kind of um role we can play with um about 20 25 days to go on the clock but we'll we'll be there to do what we can. uh we learned a lot uh that's still pretty applicable um from 2019 and 2020 but if I were handicapping this I would say singledigit percentage chance of uh passage but it indicates this certainly could be back soon. These uh revenue issues for the state are not going away. Um I I think the other thing that you know was in the memo uh that this is not

9:18 just motivated by revenue. Um, as you all recall, after the second uh walk out killing the bill, uh, the capry bill in 2020, Governor Brown, then Governor Brown said, "I'll do as much as I can by executive order." There was a executive order 2004 that created a uh a carbon cap type program with a form of carbon pricing. Um, it's not as market-based or regionally linked as the programs in Washington and California. And the in year one of compliance this year um I've heard some numbers quoted for compliance uh around $137 a ton. Uh it cost $50 to purchase a carbon allowance. In California, I think the price in

10:04 Washington is a little higher, but when those programs link, uh that price will be lower. So, regulated industries under the climate protection program, the executive order command and control program, they're very interested in transitioning away from that command and control program to something that's more market-based, economywide, and regionally linked um because it would have a much more efficient um and affordable uh compliance instruments for their industries. Um so, that's what I can tell you now. Um, again, low chance, but um I think we're going to be talking about this again um real soon. If not a special session, um this could be a dress rehearsal for 2026.

10:53 So, so I guess one of my questions would be with you being in the building representing Eb, would our position on the 2020 bill um I mean would if we reaffirmed that, would that help you or hurt you or do you think it's it's not appropriate at this time? Um yeah, I don't I don't think it would be I don't think it's ripe for a thumbs up, thumbs down. Um there's not enough uh meat on the bone to sort of give a a scorecard against the carbon management principles that um we adopted in 2019, which are still um incredibly up to-date. Um, you know, we have a few principles on things like the point of regulation, being as far upstream as possible, measuring carbon as uh

11:39 resource specific as possible, and also imposing a carbon price as close to real time like short-term wholesale market transactions. Those are all really pretty fundamental um design elements we would want to see. And uh there's not enough meat on the bone right now to to really score um what what I've been seeing so far. So, it's kind of a uh stay tuned. Um, and I I'll certainly be the first to pass on information when we could uh judge this bill uh more appropriately on how it measures up against uh our our principles and and what we kind of know from experience are really important elements of an effective uh but also affordable program or should say the most efficient least cost uh approach to carbon mitigation.

12:24 Great. Thank you very much for the update. I appreciate that. Uh with that I don't have any other questions on correspondence and we will move on to our next item which is public input. All right. So everybody who's in the room who wants to get public input you can see some of our things up here as far as uh what we do. I'm going to just read a couple of things. Um, although this is a forum not to not used as an open back and forth dialogue, commissioners and staff value hearing from diverse perspectives and receiving community input. Speakers are asked to keep their testimonies relevant to e-web

13:10 business and request that everyone share their comments in a productive and respectful manner. Should a speaker or audience member become disruptive, they may be muted and or asked to leave. Um the you get three minutes to talk when you're there. Do we have anybody on the phone today? No. Okay. So, I'll go past that. And then with that, I will gave in the public testimony part. It looks like we have eight people signed up this evening as of right now. Uh the first is Mark Hudson, followed by Jennifer Liippard. And if you just want to come up and and talk there, there's a a clock that'll start once you begin your testimony.

13:58 Smart meters present two distinct risks. Health and safety and cyber security risks. The health risks and smart meters research raises concerns regarding the risk they pose to the general population and especially children. Over 250 scientists have signed a letter expressing their concerns regarding smart meters. On May 31st, 2011, the World Health Organization's research on cancer department issued a decision that uh nonionizing radiation radiation frequency is classified as a level 2B possible carcinogen. Uh and this classification still remains in effect as of today. Um it is disingenuous for EW to publish non-transmitting smart meter radiation as opposed to when beers are transmitting. transmit radiation can be

14:45 significant and then therefore this type of information would be much more valuable to concerned e webb customers than what is currently published currently by e webb. Secondly, smart meters pose a wellocumented cyber security risk to the the grid and reliable power delivery to customers as evidenced by a 2023 study conducted by Oregon State University in addition to other independent studies that have come to the same conclusion as the OSU report. Eb reports that they have conducted third-party cyber security tests. However, they do not provide documentation as to whom did the test, the methodology or rigor that was used during those tests. When smart meters were first introduced by e webb, it was made clear that customers could opt out.

15:30 To my recollection, it was never announced that opting that opting in would become mandatory. However, e webb has through financial coercion is making opting in mandatory by imposing a significant fee on those customers who wish to opt out. At best, this is bad customer service and worst is duplicitous behavior on ew webb's part. Customers valid concerns regarding smart meter safety should be allowed for them to opt out at no additional cost as other utilities have done. I respectfully request that the board allow customers to opt out at no charge. As a customer, I did engage Eb's upper management in an attempt to get some of my concerns surrounding smart meters addressed. However, after four back and

16:16 forth emails uh trying to get these concerns addressed, I received the following reply from Eb's last email that stated, and I quote, "We do not intend to engage further in on this topic by email. You are of course welcome to share any further comments through public testimony at future board meetings. End of quote. I would appreciate the board's commenting on EW's upper management's apparent decision to outsource customer service issues and concerns to the board and if this is consistent with how you want customers to express valid concerns regarding EW's operation now and in the future. Thank you. Uh, Jennifer Liippard, followed by Janice Agnes.

17:13 Good evening. Uh, my name is Jennifer Liippard. I am here as an observer with the League of Women Voters of Lane County. The League of Women Voters is a nonpartisan political organization that encourages informed and active participation in government, works to increase understanding of major public policy issues and influences policy through education and advocacy. League observers are here to help ensure that citizens are aware of how decisions that impact our community are being made and to promote government. We thank you for your willingness to serve. Uh we are all here to promote and ensure a healthy democracy. Thank you. Thank you

18:00 Janice. Agnes or Aggars? Janet. Janet. Oh, I'm sorry. The the R looked like that. I apologize. Okay. Am I next? Yes, you are. And then Sherry Borman. Borman. I am a constituent of ward seven and as such we're uh within our ward among the lowest SCES socioeconomic status. I'd like to remind the commissioner for W seven to be mindful of that in her future decisions affecting people u of our economic and marginalized section of

18:48 Eugene. I'm here tonight. I attempted to make my payment this spring. I've noticed I'm on the budget billing plan. I'm being charged $5. I get my social security check on the third of every month. Promptly, when I know it's deposited, I call first thing e webb because they are seemingly a monopoly. I have no other utility I can choose. Uh, and need I remind the audience, social security checks are actually a month behind. So, in May, I'm actually getting my check for April to add to the worries of making your payments. So, in my talk tonight with e webb um online uh uh

19:36 trying to issue my payment, I call it in. I was told I was being charged a late charge of $5. I wondered why. Uh she pointed out that my credit union happens to be Selco. They were doing a courtesy by putting the money in, but that stopped this spring. So in other words, I was getting my social security about a week earlier wherein I was able to make my payments with confidence. For some reason, your vendor who now does the billing warns me uh that you're late. You're late. You're late. When in years past, I've always prioritized e webb as my first bill to pay because no

20:22 one wants their lights turned off. I have medical issues and the commissioner for our area needs to be representing and be aware that she is representing the lowest SCEs here in Eugene. Also, I'd like to ask Ew Webb not to be the billing agent for woolfully cannot follow a budget. Uh, city city council members and the mayor are just pressing taxes along with ew webs raises in our uh electric use or what? Good God, we're a hydroelect electric state and we're selling electricity down to California and they can't turn a profit and still you're

21:08 nailing us to the wall with your raises and it's hard. If I had the money, I'd pay it. I don't have that kind of money. It's quite ner and you guys get 37,000 a year. Thank you, Sherry. Bornman. Thank followed by Wilson. I'm just gonna say Wilson. Hi. Hi. So, my name is Sher Bordan and I am the EW Webb educational grant coordinator for Bethl School District. And I just want to let you know just how much we appreciate what you do for our future of Eugene, our BETHL students. And this year, our BETHL students have been able to have some enhanced hands-on

21:54 experiences in science that would not have been available without the EWB's educational grant program. Uh the program describes uh provides experiences beyond our science curriculum to make the learning meaningful and memorable to our students and their future selves. This school year, we offered resources to all 4,800 of our students in Bethl School District. And the resources were available directly to our classrooms where they created valuable experiences at all grade levels. These resources included science kits around water, energy, weather, and climate. Discovery labs to ignite a love for science at the primary grades beginning with our kindergarteners. The study of salmon as a keystone species in our watershed. the wind turbines and other renewable energy

22:41 resources. Although we are looking for resources for hydro power so that the custodians don't hate us with what we currently have in mind. So they don't like they don't like the mess of the water. Um we also um are doing electric vehicles. The students are building and modifying them and then competing for the title of the best. And this is coordinated with 4G. Uh sometimes uh our grant is as simple as providing petri dishes, beers, a book to read, read allowed or the funding for transportation to a site and other supplies to make the lessons meaningful. And all of these are done within the priority topics for the educational e webb grant. Recently we held our pilot demonstration for the power town demonstration u where guest visitors from e webb lance and came and

23:28 presented safety around power lines to our fourth graders. The students were very engaged and they could recall all the important information. The thing that they liked the most was that the demonstration used real electricity so they could see with their own eyes the electric arc as parts made contact. as much as they wanted to manipulate the parts themselves, they did understand the safety issue of students doing that part of it. Um, I really look forward to working as a team with our local school districts, the other the other school districts that are part of the educational grant. And we are creating our future community members with a foundation of learning and as perspective to help preserve our resources and use them wisely. I just wanted to finish with a comment from one of our Bethl teachers. She said that

24:13 these community educational grants make it possible for my students to have experiential learning opportunities that they would not be able to have otherwise. Students are very concerned about the health of our waterways, our sources of energy, and our planet as a whole. So, these lessons are always engaging and rewarding for all involved. These funds provide resources that allow all of my students to participate in the programs. Our classrooms are transformed by the generous community donations. Sorry, you can finish. Without them, our science classrooms would not be as vibrant and as impactful as they are. Great. Thank you, Wilson. And

25:00 hello, my name is Wilson Weds. Um, I'm in Sonia's ward. I've spoken with her before and she believes that whatever she believes is how she's going to vote, not on her constituents. I'd like to piggy back on Miss Ay's testimony a little bit. Everything that Eue Webb does should benefit the public. Every single thing. We're sitting in a $53 million building right now that you guys built in 2010 that you said you had to build because you had an influx of money you had to spend. Six months later, you raise rates and you said that you have to raise the rates to offset the cost of this building. This is a 22,000 square foot building that you guys did not project to have any form of customer

25:46 service here. It is insane that I come here today and I'm greeted by a security guard who is an employee of EW. Why do you guys need a security guard? you've never had a security guard employed for the web before. Also, um well, on on the on the the basis of your your building and then raising the rates to offset the cost of the building, you're lying and manipulating manipulating the public. I can't go down to the old e webb building without a appointment and that was never the case before 2020. I don't like your guys's new norm and everything

26:33 that you guys do should benefit the public and it is not benefiting the public. I've had multiple conversations also with Rod who I believe is or was a general manager here and um I don't think that when you guys vote that you should be voting with your personal interests in mind because when you're handing out free meters to lowincome housing because you feel that that's what we need is lowincome housing when as a builder I have to purchase purchase thoseelves and then offset that cost to my customers. That's not fair. And going over your guys's um price layout on your online, you have 4 cents

27:20 allocated in kickbacks to the city of Eugene included in our bill. What the hell are we paying e webb or what are we paying the city of Eugene for? You guys are a public utility. a public utility that was formed because an outside organization was charging too much for water. For some reason, people want to forget that history. You can't find it anywhere. I wonder why. Every time I bring it up, everybody's, "Oh, no. That's not why Ew was formed." That is exactly why Ew was formed. That's what you guys need to get back. Serving the public respectfully.

28:09 All right. Hello fabulous web board members. And I was going to say hello to Frank and he's not here. Um I'm Tana Shepard, also known as ECO here and Eugene um 4J. I'm in W 8. And um I'm here just uh I know that as you prepare to vote on funding for the long-standing grants that are generously provided to our school districts by EW Webb, I wanted to take a moment to share my gratitude and appreciation for the opportunity to serve in my role and provide grant funded projects to our students in our in our school district for the past eight years. Our 4J web education partnership has become even more integral part of our district since the co 19 pause. In our creative pivot, our program expertise has helped our district walk the walk with climate action by providing consultation, professional development, and planning opportunities. In my capacity as grant

28:55 coordinator and teacher for the program, I not only serve all the students in our district at one point or another, 15,500 at least, sometimes up to 16,000. Um, I also serve the teachers with the program. Um, and let's see. Sorry, I lost my place. That's what happens when I prepare. Um, all right. So either directly or through the materials and v um videos that I create. I also have the opportunity to support our teachers and staff to create projects and educating them on climate change ramifications in our area. Our program is about people making lasting connections and many relationships with students and staff that encourage a deep connection to this place, our home, Eugene, Oregon, and the natural resources we have, ways we can adapt and mitigate in the fa face of climate crisis and a hands-on approach

29:40 to solutions. Um, here are a few testimonial quotes from teachers and students about our program. As a longtime participant in the EV challenge says, "In my opinion, the consistency of the project has been its greatest asset. Being able to rely on the project year after year has allowed me time to modify and refine the project to develop the best experience for my students. At the beginning of the year, this is the project the students always ask me about and are most excited about. I'm at a point in my career where my current students are parent students parents were former students of mine and they often tell me how much they enjoyed the then solar car project when they were in middle school and they're excited their child gets to participate. A couple from students hear about the EV challenge um from this year. I love the hands-on

30:26 learning and the whole creative challenge and the work. It's not only interesting but enjoyable and engaging. and another um gave a five-star rating because it was a fun learning experience for me to be able to work with a couple people on building a functioning car. It felt like a reward after doing the project with all the paper learning we've done all year. And then in from a couple of our salmon folks, I know I'm going to run out of time and I am going to probably take an extra second. Um every year the program gets better and better. It's like a welloiled machine and the kids really enjoy it. There's so much learning. for many of these students is the first time they've ever been on a field trip and that's in third and fourth grade. Um everything's very well organized and receiving the salmon and receiving uh assistance with planning the field trips. Um that this

31:11 person is in awe of me actually and all the staff that I that I hired to work with us and how much work they put into making sure everything's go smoothly. I could go on and on with testimony from our um people, but this is definitely one of the most important things that um our teachers identify in our district. So, thank you very much and I hope you'll consider the funding. All right, next is Joshua Horn, followed by our final speaker, Aden Adrien Basset. First, I I want to concur with everything that Mark said about smart meters because he articulated it so well. Last month, we had a bunch of

31:58 people show up speaking out against the proposed exorbitant fees that you guys are starting to discuss for uh the the opt out, which was supposed to be free. Uh, I mean, you guys never really guarantee. I mean, we we started with an opt-in program and we were pretty happy with the optin type of program from the beginning when we were speaking out about this like over 10 years ago. and and and now with this charging for the opt out, it's uh you know, it's clear that you guys are again, like some other folks are saying here today, not paying attention to what we're saying. The

32:45 public is speaking out against this idea of charging exorbitant fees for the opt out. And it's clear that there's there's some agenda here in pushing this forward because otherwise why would you be implementing a meter that lasts like 3, four years, 5 years max. Uh instead of an analog meter that costs a fraction of the cost and lasts for 20 30 years. You know, I it doesn't make any logical sense aside from that this is a this is a money and data tracking agenda. You guys are

33:32 clearly going to be monetizing our data if you're not already. Uh selling it to vendors for advertising, surveillance purposes. I I've gone over this stuff plenty of times in previous meetings, maybe not with the exact same board that we have here, but you know, it's like it's it's time to listen to what we're saying and and also to respond to it because, you know, after a last week we had or last month, we had what like eight people maybe speaking out against this proposed these proposed uh tariffs on on opting out for smart meters. And and after after the meeting was over,

34:19 when the public or when when the public comment ended, it's like the we were waiting for a response. You could hear a pin drop in the room. It's like crickets, please respond to us. Tell us what's going on. What is changing because of this public sentiment? That's what we want to hear. Thank you. Thank you. Aiden Bassid is our final. Thank you, President Barovski, Vice President Schllober, I guess, in absentia and commissioners. My name is Aiden Basset

35:05 and I am a local attorney. I want to begin by thanking you all for your diligent work supervising the work of EWB's excellent staff and to thank staff for the extensive detailed resources they provide for the commissioners and the public to stay informed. In advance of this evening's discussion of the capital improvement plan priorities and EWB's impending choice about its contract with BPA, I wanted to discuss Senate Bill 688, which is currently in the legislaturator's joint committee on Ways and Means. I missed some of the earlier legislative updates, so I hope this is not duplicative. As you likely know, Senate Bill 688 would direct the PUC to adopt a framework for performance-based regulation of electric utilities by

35:51 2027. Depending on the incentives and penalties the PUC adopts, performance-based regulation could mark a sharp departure from how electric rates are traditionally set have been traditionally set for Oregon's utilities. Among other priorities in SB 688, the legislature directs the PUC to pursue the public interest by incentivizing improved energy efficiency, reliability, and resiliency. It also emphasizes reducing greenhouse gas emissions, reducing costs to rate payers, developing distributed energy resources, and enhancing services for low-income customers. Again, as you know, E Web already excels at many of these objectives and indeed has been a leader on demand response initiatives and procurement of low emissions power

36:37 from our hydroelectric dams. As Eb considers its contract with BPA, however, EW has noted it prefers BPA's load following product to maximize pricing certainty. This choice has its merits and I do not presume and I do not presume to know better than staff how best to shield rateayers from unpredictable pricing. Still, I would urge you to collect as much information from staff as possible on how the prospect of performance-based regulation is influencing which contract Eb chooses, which to be clear, it certainly should influence. If passed, Senate Bill 688 would create a new regulatory landscape that would likely last throughout EW Webb's 16-year contract with BPA. I hope you will all have thorough conversations with staff about

37:23 the implications of SB688 before the contract decision is made in July. With the remainder of my time, I will note my strong support for EW Webb's implementation of its smart meter program. Thank you all. That concludes our public testimony. Uh, thank you to everybody who came out. I will open up the floor to commissioners for comments or questions. No comments. Oh, John. Yeah, I'll make a Thank you everybody for coming out. Just a couple response. We're not going to have back and forth dialogue, but to address a couple things that were brought up by Miss Aerys and Wilson. Um uh I heard a reference about us getting

38:09 $37,000 a year. We don't get paid a penny. This is all volunteer. I've been sitting here for 18 years. Whatever. Um and so I'm not going to debate with you. And then you talked about city. You know, the city's already raised. We have to bill for storm water. Has nothing to do with ew. They just raised those rates 18%. You're going to see that on bill. We can't do anything about that. I didn't hear that. that the city just raised storm water fees 18%. And and that's going to be on and that's going to be an ew bill. Has nothing to do with ew, but it's coming. Understood. And and I'm I'm you know, I apologize, but I want to thank you for coming and reminding us about how sensitive a lot of people are to even the smallest fluctuations in our rates. A lot of this we can't control. Uh Wilson commented about the four cents. What's that? S what's that for? That's

38:55 silt. The acronym is compensational taxes. We have to pay the city 6% of our re we are the largest revenue producer for the city of Virginia. We give them a check for 1.4 1.6 million a month. They get that into their general fund. So when we raise rates I'm not going to debate with you. Thank you. And uh so I just wanted to build points of clarification. And so yes it is all right. We have no choice to do to do that. And even though the the the ordinance says 3% we pay six because that happened in the 50s. How that happened I don't know. We can't reverse it. I've already tried. But there's there's certain things we do our best to keep rates down. And I know you don't believe them, but we pay the rates, too. I believe you do. Well, we all try and uh and I I can say that for

39:41 the rest of my colleagues here, too. They try. We do everything we can to keep rates down. And you're going to see this. And we have two contracts coming up. One for 19 million, one for 23 mill $23 million just to trim trees. And uh so this is not an inexpensive thing to run. So, I appreciate your comments because it reminds us of how sensitive a lot of people are to these to the great implications. So, thank you for that. And uh Aiden, thank you for that. And uh Josh, I can you can rest assure we're not selling your data. We already know how much utility, how much water power you consume. And we don't care how much you consume. I hope you don't consume too much. But as far as selling data and things like that, that's that's just a misunderstanding on somebody's point. But I can guarantee you that this organization selling data. So, uh, with that I'm done. Thank you. Thank you,

40:28 Sonia. Well, while John actually covered point by point each of the items I was going to cover, um, I do want to just make a quick comment. Um, I personally grew up in a house where we didn't have very much money and I lived in a trailer until I was 15. And so I'm very very careful about how I vote because I know firsthand what it's like to live paycheck to paycheck and I support the people in our district with that mindset every single day. So just going to make that comment and then um I wanted to thank the others um for coming out and talking about education because part of the work that we do here helps inspire kids to stay in school and get

41:14 out of poverty. And so I fully intend on supporting those programs because it helps make our community better and that's part of why we have a public utility. So thank you for that time, Mr. Morris. Yeah, thank you. Um uh Chair Broski, um my colleagues have said what I was going to say mostly. Um I wanted to uh echo the the conversation that's happened that uh my time on this commission, every single meeting we have used the word affordability. we've brought up conversations about how to keep rates down. Um, that's never not part of our conversation. Um, and I think that that's in our values and I think that that's in our organization. And similar to Commissioner uh Carlson, I also grew up lowinccome and without

42:00 funds and I think that that's a a shared understanding of exactly how challenging it could be. Um, uh, Miss Erza, you brought up an interesting conversation though, I think, through your point of the billing date in particular when it comes to certain, um, other resources that are coming in. And I think that there's some questions that, uh, I am going to ask, uh, in the future about that and so learning more about that. Um, I think that uh, I wanted to take a quick moment um, and uh, with Sherry and I'm so sorry I didn't get your name. Tana. Tana. I wrote Anya, which is I think wrong. Uh yeah. Um and thank you just for for your support and um I had an opportunity to uh to chat with one of the 4J parents. I'm sorry, but uh and uh

42:48 to speak about their their kids and how much they like the the EV program in particular and how they're really excited about it. So um uh genuinely thank you for your support and thank you for coming out here to to express your support. And uh to uh to Aiden, uh thank you for your advocacy on Senate Bill 688 in particular. Um Jason is one of the smartest people I know that's working in the legislative building. Um and he is consistently peppered with all of my questions about uh all the bills that we're working on or supporting. Um so I uh I know it's in a joint ways and means. It may continue, it may not. That's a weird session, but um I know Jason is 100% on top of it and considering that for the rest of our commission. So, thank you all for your

43:33 testimony. All right. Thank you. Um yeah, I was just going to speak to Aiden. Um, I know that a lot of the the bills that come through in regards to uh the energy industry um go through the PUC and as a community-owned uh utility, a lot of times we're not subject to the same regulations even though we usually are at or higher than the standards that are are prescribed by the PUC. So, I'm not sure whether or not SB688 would would apply to us, not having read the bill, but like Tim said, uh, our legislative affairs people are keeping good track of that for us, will let us know if that's

44:18 information that we need to have going into our deliberations on our our upcoming decisions regarding the Bonavville Power Administration contract going forward. Thank you all for coming tonight. Anybody else have any comments? uh assistant general manager. Two quick things. Jason did confirm that leaning into it, but if it's not on uh that, uh that the Senate bill does apply to IUS. Okay. Only. And I just want to make sure Miss's uh customer service could reach out to you if we made sure that uh we had your contact information. I don't have a problem with that that music. 30 minutes on hold. I'd rather

45:06 have silence. Thank you. If you could just leave your contact information. Thank you. And I think it's probably on the form here. So, thank you everybody. Thank you for coming out on a beautiful evening. I appreciate it. If I didn't have to be here, I probably wouldn't be here. And I appreciate you guys coming out and sharing your thoughts and input with us. With that, I will close public comment and we will move on to our next item which is consent approval of the consent calendars. So we have consent calendar A. Can't remember which one mine's on.

46:00 looking mine is on two and three. Yes. And I also wanted to pull number three. So I'm going there's just three items on it. Right. Minister. So, why don't we why don't we just I was going to say why don't instead of approving the one and doing it, let's just pull let's just talk about items two and three and then we can approve the consent calendar as as a a slate. So, with that, do you want to start off, John? Yeah. Um item number two, I know I asked a premeating question on it. I got a nice response, but I'm still not satisfied with the answer. Number one, the contract. Um,

46:46 the original contract was 145,000. You're requesting 440,000 in this request, but the bids were only 145, 181, and 141. Help me with that math. I think it's 15 year. Hang on. Let me look. Right. But this request is for 440, but they bid 140. So, what are we approving? Susan, if she can show up online here for us while I pull it up. You can get back to me on this. I mean, if if this if it's going to be timeconuming. I just I just don't understand the math. There we go. Okay. Oh, this is because it's a 10-year

47:32 agreement, I think. Let me double check. Sorry, I didn't have that in the top of my head. 15% the 15. Yeah, it's going longer because this one is attached to our FK requirements um for the wildlife mitigation. So, this is tied to um to Carmen. Leeberg Forest is tied to tied to Carmen. Correct. It was a few years ago and since I've been in here um Commissioner Brown, it was tied to that. We have some of our wildlife mitigation in the Cogswell Creek area is tied to the Carmen Smith wildlife mitigation. Yes. And I don't know if Lisa's in the room if she can help talk about it. Yeah. Hi, I'm here. I can I can answer

48:17 that uh a bit. Commissioner Brown, our Carmen Smith license requires us to manage 343 acres for wildlife. Most of that requirement we meet on the transmission line. Um but there were and other Eb owned lands up near the Carmen project. uh we needed to get to that 343 acres. So, the settlement parties and EWB suggested that we use the Leeberg Forest as essentially off-site mitigation for for to meet those terrestrial um habitat needs. Uh off the top of my head, I think I I can't remember, but it's somewhere around, you know, 100 acres or so in the Leeberg Forest are dedicated to uh meeting that Carmen Smith requirement. So much so that those portions of the forest have

49:03 actually been um included in the FK license, the FK boundary project boundary for our Carmen Smith license. There might be other options in the future and we went into that um agreement prior to Liber being um offline for DM safety issues. So there are probably ultimately other ways we can meet that requirement, but there's a process involved in that. It would require a license amendment through FK in addition to uh collaboration and approval from the settlement parties um for the wildlife management pan plan. Okay. Well, my point is is that, you know, we we hear about costs and this is in the grander scheme of things not a lot, but it's a thousand acres that we're managing adjacent to a canal that we're not running that and and we're

49:49 paying somebody to go up there and look at it basically and and not do much else in that I can see. Um, and I'm just wondering the cost effectiveness of of us continuing this because it just doesn't seem to me to be prudent use of the resource to sell it. Uh, Commissioner, could I respond to that piece as well? So, another benefit to the Leeberg Forest, it is ups slope of the Leeberg Canal. Yes, the canal is out of service and dewatered, but we have concerns about slope stability issues. We do have some landslides up slope of the Leeberg Canal and it's really prudent for us to be managing that lands to the as responsibly as we can um until we get through the decommissioning process of Leeberg and um and surrender uh that part of our

50:35 license. So there's an additional component there of pro needing to protect um the ups slope so we don't have a landslide that might um enter the canal and cause some some dam safety or other issues. Uh ultimately my personal preference is we hang on to that property so that we have the ability to manage it responsibly until such time as Leeberg is decommissioned. after Liieber's decommissioned and we have, you know, all of those um protections put into place, um that might be the time to to look into other options for the for the parcel. And then in addition to that, I would say that from Susan's perspective, and she can certainly chime in on this, it does also provide uh some benefit from a source water protection

51:21 um perspective. I'm not going to win this argument, so thank you very much. So, I I'll I'll move on on this, but I'm going to keep an eye on it because I just don't think it's good for us to have a thousand acres of pride and timberland um that that is a you know, we can monetize it and if it doesn't really perform, I mean, because we we contract with people to to manage harvests and so, you know, we can sell it with contingencies on it and use the money for a better purpose, I think. So, I'll I'll um if you want a a motion to move uh to item number two or you want to go to number three? Yeah, I'll go to number three. I'm I I was going to pull number three. So, number three is the contract for our tree trimming. Um and I just had a couple of

52:07 questions regarding the the proposed vendor that we're we're picking. Um we're we're going with the Westlane Tree Service right now. We have a contra, my understanding is we have a contract with them for three crews upriver. This would be expanding them to do the whole systemwide, which would be adding nine more crews. Um, and I was just concerned, you know, I went on and I looked at their website and I was like, well, one, they didn't have a website. They had a Facebook page. Um, and and then second one, are they I'm wondering why they got chosen number one over Davies, which is the one that we have a contract with now. that was cheaper and has all the equipment. I mean, are these people really going to be able to stand up nine

52:53 more crews uh in the in the coming year? I just I I'm kind of want to have some answers how they rose to be number one ahead of the contracted that we're dealing with right now. That was actually a lower priced bid. sure stand up the crews that they need. I don't have the details on where the proof is of that, but I'm going to turn it over to Tyler. He may may know more and certainly he or Clinton will know more about your question on how did they score higher. Well, and and the other question that I would ask is I mean in the past we we switched from Writs to to Davies because there was there were

53:38 performance issues that we felt with Rights and I'm just wondering are we is Davies are we having performance issues with Davies that made them drop down lower on the scoring or whatever? It just it just didn't pass my smell test here. Short answer to that one is yes. Some of the scoring related performance with Davies was part of that one. uh on the procurement of the people needed to do the labor. It's pretty common for the tree crews, whoever gets the contract. Basically, they open up shop and people suck over that contractor when the contract. We experienced the same thing between Davies and Wright last time. So, I believe they're about there right now getting ready to launch on this contract. So, it's a bit nomadic as I'd say. Uh the folks that want to stay in

54:23 this area will go to who wins those contracts for the utility. I I'm I'm less interest less worried about the the the people as as opposed to the capital equipment standing up nine more crews of bucket trucks and those types of things. We can check on that part of it, but as I understand they're ready to rock once the contract is ready. Okay. Um John. Yeah. And just a declaration, I manage a property where Davy rents they store all their equipment. So I'm very familiar with that policeman. I have no present or future contemplated interest in the outcome of whatever this contract is just for the record. But I I too am in wonder areas was apparently their performance. It's a quarter of a million dollars difference. Davy was quarter million dollars less than West Lane. And

55:09 I like local but I also like a quarter million bucks. And so I'm wondering was there how do you measure a quarter million dollars of poor performance because Davey has state-of-the-art equipment, state-of-the-art trees or crews, things such as that because I I know what they have. It's all brand new. Uh, I just wondering if if was is that just a subjective judgment because we're we're paying $250,000 more for this contract than we would of Davey that's already in and established and wondering how that equates into your decision-m process. I can speak to the process a bit and Quinton can pitch in too, but uh essentially it's a scoring based system. We get a committee of experts in the utility to score on these different factors. the scores shake out what they

55:55 do and that's that's what orders it. There is some parts that hard and fast on the qualifications, the pricing that part and I think it's 25% of the overall score is pricing in this one. It's pretty consistent scoring methodology with all the contracts we do that are RFP. So I would say this one bubbles to the top considering all those factors like a triple bottom line uh not just taking into account cost. So now what point equals what money? I probably can't speak to that, but that that's how we shake out the the winners. And this contract starts July 1st. Yeah. Right. And so if they don't have the equipment, they're going to get the equipment in the next 30 days. Yeah. Or they would default on the contract. Okay. So I I could I could add a little bit to that too, John. Um so um regarding the

56:42 price, uh the price that you're seeing right there, that is a price based on 25 different criteria of a bid table. And it's might not necessarily be the actual price that's going to be per year. You'll notice if you actually add those prices up, we'd be we'd be asking for 29 million instead of 23 million if that was the case. Um our staff took best estimates of like they're going to use this piece of equipment for approximately this many hours and came up with a table to try to compare apples to apples. But they also know that they have experience managing Davey and Westlane as well and there's some efficiencies that they think they will gain. So the pricing will actually be cheaper in the long run in some areas.

57:28 So now I'm sorry I was done, but no, I'm not done because you just scared me to death because I'm I'm being asked to approve a $23 million contract, but you're telling me that it's really not 23, it's 29. But the numbers that I'm seeing aren't real. Help me. I like to keep it really simple, but I'm understand it because that's a hell of a lot of money. Yeah. Yeah. I I can understand the confusion there. That that that is definitely a maybe I didn't say it correctly. So, we have a price schedule that is going to list out all the separate pieces of equipment. And I'll just look at one right now real quick to take a look here. So, say we have the supervisor, crew leader, journey level trimmer, apprentice trimmer. We estimate that that we're going to be using them for approximately 2,000 hours over a certain period based

58:14 on historical usage of past contracts. And we have equipment. We guess we're going to be using those that equipment at like a,000 hours for a trailer. There's medium saws at 2,000 hours. Each one of those light line items has a separate price that they're using to compare apples to apples. What would this cost if all vendors being equivalent are going to do this work exactly the same with those pieces of equipment at these rates? And that is what that price that you see in the proposals and bids received. That is that total price that's there. So for the three crew price for Westlane, that is $1.836

59:01 million. Now we have that pricing. We have that experience with Westlane. We know what their previous what their current pricing is and what they're bidding at this rate right now. We know how much we've been using them. So using the calculations that we have with their historical data and our current experience with them, we are able to tabulate that the pricing over the next 5 years with escalation should be approximately $23 million, not 29. I'd also add a little historical context looking back at previous contracts like this. Last one we did was in 2020. Now granted that was before it was April 2020. It was the last one was approved. That was $20 million. It was two different contractors, but it was the exact same methodology used for all

59:47 facets. You know, there was tweaks in the contract based on our lessons learned for performance factors, but the judging and all that kind of thing was similar. That's about a 15% increase from five years ago, which feels fair, I would say, honestly. Okay. Um, you want to move for I'm just trying to think if I have any more questions? I guess the only other question that I would have was in the past we split it between two contractors. Is that an advantage or a disadvantage? I know that in my business, if I've only got one precur

1:00:33 vendor that can can be problematic, but it can also be advantageous. And I'm just wondering in this case, is having one obviously we feel that having one vendor is advantageous as opposed to having two. Is that kind of where the committee landed? There's tradeoffs, but in fact the scores shake out with the scores. We don't necessarily say we want to or we want different. We have had times when the contract is shook out to be all right tree services. They did that for multiple contracts in a row. Then we started diverging. Um the tradeoffs are really Quinton mentioned it mobilization. You know, you can you can be a little more fluid with your decision- making if you're the folks directing the work. Uh there's also just the partnership part. you know, if you

1:01:19 have a bigger project or some pinch points, you can't put two different contractors together willy-nilly. Um, but like you said, the all all your eggs in one basket is another thing to think about um as a trade-off. But we have had it both ways and it's just that's why we have foresters on staff that manage those crews every day to to keep tabs on that so we would know if there's an issue right away and not be surprised. Great. Well, well, thank you. Thank you for the information. Um, it I asked the question just because it it kind of jumped out at me. I also agree I like the idea of a local company as opposed to a California-based company. Um, I just had concerns about it and I wanted to voice those concerns so that I can make a an informed vote on on behalf of

1:02:06 my constituents. So, with that, I would accept a motion. I'll move to adopt consent calendar 8. Second. Any other discussion? All in favor? I opposed. That's unanimous. Next, we have consent calendar B. Move to adopt consent calendar. Oh, I'm sorry. Okay. All right. We're pulling number six. So, let's move to approve the consent calendar B minus item six.

1:02:53 All in favor? I opposed. All right. And Sony, you want to speak to item six? Yeah. I just wanted to talk a little bit about the the timing of the features that were proposed. It look like Sorry, get on the mic here. I want to talk a little bit about the timing of the fees that were proposed. Um, it looked in there like they were going to go into effect two days ago. I think it's been updated. So, it's now July 1st. Is that correct? We did update that to reflect that they would be effective July 1st. Okay. Um, I put a little bit of a pause there because it seems like in some of these major projects, you know, somebody gets a quote, then um, it might take a

1:03:38 little bit more than a month to get the word out about that price increase. And I um, I will make a comment that I have a personal project that I literally got a quote on for two weeks ago. And you know I I try to interact with e webb when I'm a citizen as a citizen so that I get the same level of service or you know foibless or whatever so that I can talk to that but um it looks like many of these fees are going to go up in a very short time frame that we can't communicate that out to the public and many of the projects are already kind of underway. So, I just have a little bit of concern for that for the general public. Um, and how quickly these go in. You know, typically when we have rate increases on the other side, we vote in,

1:04:25 you know, early December. There's a couple of months for our rates to be discussed in November and December, and then they don't go into effect until February. And so, there's plenty of time to um, you know, actually get the word out about what those changes are. And it seems like I know this affects a smaller portion of the public, but it still affects a pretty critical part of our public in terms of our infrastructure. And I know that we're already seen as a a challenging community to operate in in terms of our development and other things. And this I don't know, this seems like it's another kind of nail in the coffin, but I'd like to hear other commissioners thoughts on it. It's only my first interaction with it, so maybe others have had um different experiences.

1:05:17 Amber, do you want to speak to that or I was I was going to let anyone else chime in since she did ask for commissioners. I don't see anybody else. I don't have any interaction with it at all. You know, if it affects me, it affects me. You know, I don't sorry I don't pay attention to that when because I'm downtown and if I'm on the fiber or whatever, I'm going to get there's nothing I can do about Well, some of the fees are related to building and other, you know, forms of So, it's not just the fiber, right? I mean, there's there's uh system development and there's other fees that are increasing that are fairly significant. The system development fees are not included in this packet and they have a

1:06:03 they do have a process by statute that they follow. Okay. Well, let me get down to the other fee here. So, there's transmission service. There's sorry, maybe it's not the SDC fees, but there's a number of other fees. So, the um water service charges and pricing and those impact residents and other developers. Correct. they u so historically we have we have implemented fees in the month following board approval. It's certainly something that we could consider to do differently. These are fees that um go throughout the utility and uh they

1:06:53 those individual work units have their own processes for how they manage that. uh it hasn't typically been subject to a widespread communication as most of these are as as needed. Okay. I'm just curious, you know, I mean, if others must support it, that's totally fine. I've already declared my conflict of interest, so I'm going to abstain from voting on it. But, um, it just kind of struck me because there are like fairly significant changes. It appears to me, and I I could be reading it incorrectly, but thousands of dollars that are going to impact people that are trying to build very much needed housing in this community in, you know, not in a short amount of time. And it just seems wrong to hinder

1:07:40 those projects without having, you know, some additional support and communication around it. Anyways, that's it. Okay. So, I believe the fees that you're referring to are ones that we actually discussed uh at at some length last year and phased in and these are consistent with uh what we proposed last year as a phase in approach. So, when staff are communicating these changes to customers, do they tell them the new rate or the old rate? I'm just saying I'm just throwing it out there. It's something that we should consider as we think about making our utility more customer friendly. Okay. Yeah. And and that might be

1:08:26 something we could look forward to in the future that possibly we say, you know, this is a scheduled thing that happens on a on a regular basis. It's happened a couple of times since I've been on the board. Maybe we say try and put this agenda item up further in in the spring and say, you know, we raise our rates on July 1st every year or if there is going to be a rate increase, it it takes effect on July 1st and then then that is known to a developer that hey, if you can get it in before then, kind of like at the city, if you can get your building permit before they raise the fees, you're good. that may be an option going forward that might alleviate uh Commissioner Carlson's concerns. So maybe we can look forward

1:09:11 to that in the future as a idea. Consolidating the fees to once a year was our first step there and so certainly welcome ideas on how we can improve a transparency on that. Okay. Thank you. With that, would I would entertain a motion to approve item six from consent calendar B. So moved. All in favor say I. I. I. Opposed. And abstaining. Commissioner Carlson abstaining. Motion passes. Three two a half. I don't how you how you put that out there. Okay. Uh, next item is prior

1:09:59 year's audit. Action item number eight. Before I hand over this presentation to our partners at Moss Adams, I did want to make sure that I acknowledged and maybe I should say who I am for the record. Deborah Hart, assistant general manager and CFO. And with me is Rob Prey, our general accounting supervisor.

1:10:44 We also have uh the fiscal services supervisor, Aaron, and uh Tia, the finance manager, available for questions after. Uh but before I hand it over to our Mothams partners, I did just really want to acknowledge the hard work of the accounting team this year. And a clean audit opinion is an accomplishment in any year, but this year they did that with 11 months in um in SmartStream and one month in SAP and navigating a new system. And uh so I just really want to acknowledge their work and appreciate them. And with that, I think we have

1:11:33 Keith and Hi This is going to be a short agenda item. There we go. Very good. We did not have the ability to unmute, but uh we are we are good now. So, hopefully you can all hear us. Okay. Uh thank you for the introduction, Deborah, and thank you commissioners for having us here this evening. Uh yes, this was a a little bit later in the uh year than we were

1:12:18 typically before you kind of giving this presentation to wrap up the the audit process and give you those final results. Of course, as you heard with the conversion from from SmartStream over to SAP and all the work that went into that and closing out the books under the new system, a tremendous amount of work that had to be done uh to be audit ready uh like e webb typically is in the past. So few months uh later that we're here than than typically but the audit is complete at this point. All of our audit reports we've we've signed uh all of those audit opinions and are here to present those final results and answer any questions that that you might all have as well. Uh so with that we can go ahead and advance the slide and just a quick run through of our agenda. We're going to give you a

1:13:03 quick recap of kind of the the core group of our audit team. uh go through a summary of the different services that we provide as part of this process each and every year when you hire us to come in and and do an independent audit. What does that mean? What are the deliverables that uh we have to produce and what do each one of those mean? Uh Iay Alvarado, who's our audit manager on here with me uh is going to go through the significant audit areas or really where we spent the bulk of our of our time and some of the new items that we had to take a look at this year. Uh then we'll go through what our actual audit opinions and reports uh say and the highlights from those and some additional required communications before we close things out. Go ahead and advance the slide. Uh this is uh kind of just a

1:13:48 quick snapshot of the core group of our team. we had uh many more staff and seniors that are involved as we're on-site working uh kind of face-toface with your e-web finance staff and others throughout the organization to conduct the annual audit each and every year. But this is kind of the core group of our of our team kind of the the managerial level folks. Uh in addition to myself, we had Laurel Basho who served as our what we call our concurring reviewer. It's really a QC review role that we require on every audit that we do that we have an additional person that's not otherwise involved with your uh staff or or there on site with the rest of our team. They're coming in making sure are we following our professional standards? Do our final deliverables include all the items that they should include. Do we do our risk assessment appropriately? Do we

1:14:34 follow through on the items that we said we were going to do during the planning phase? That's really the goal there. Uh and that person has to sign off on everything before we can issue our our final reports. uh IDA Alvarado, as I mentioned, was our audit manager again this year. She's been on the audit for a few years now. And then JD Men, who served as our in charge senior auditor, leading kind of the rest of our seniors and staff that were uh working through the audit on site. Go ahead and advance the slide. I know there's a lot of words on this page, so I'm going to just summarize this for you, but this is again a a snapshot of the different reports that we that we provide and the services that we provide as part of this process. This can differ a little bit from year to year just depending on um uh if you have a year in which you are

1:15:19 expending a significant amount of uh federal funding which when I say significant uh the the threshold there at a federal level is $750,000. If you're spending more than $750,000 of federal funds in a given year, that triggers an additional compliance audit over the use of those funds, how you spent those funds, was it in line with the underlying grant agreements uh from the federal agency. Right? So, there's a few additional reports that we issue in those types of years, which this was one of those. So, you see a few more boxes on here maybe than you've seen in in other years if you've uh sat sat through some of these presentations in the past. Uh boxes one and two are really one deliverable. It's our our main auditor report over the fairness and accuracy of the uh your annual financial statements. So for this

1:16:04 time being December 31st, 2024. Um, and to get to that point where we can issue that report, it it involves a lot of detailed testing, uh, where we're tracing back to contracts, agreements, invoices, uh, cash receipts, and dispersements, all that kind of underlying substantive evidence to support what's been captured and recorded, uh, in your team's general ledger in SAP and making sure that is all summarized and presented in your financial statements uh, appropriately. Uh and then box two related to that again same report just one deliverable but uh kind of a different uh type of service than what I just spoke to. This is really kind of looking at that actual draft financial statement that your finance team puts together. making sure that it includes all of the disclosures

1:16:50 that are required under the governmental accounting standards that you're required to follow and it's presented in kind of the format that the governmental accounting standards requires you to present your financial information in each and every year as well. So, kind of doing that technical review of the actual document itself, making sure all the numbers in there are consistent with what we audited and what we saw in your in your uh SAP system as well. Uh box three has to do with an additional report that we put in there uh that's in compliance with government auditing standards which is just a little bit different from corporate audit standards and it's really only required in a year when you do have that additional uh uh federal funding uh expenses during the year that triggered the additional audit. Uh and so this is something where

1:17:35 uh we have to conduct the audit in accordance with government auditing standards which really just has this additional uh reporting component where we have this additional audit report where we have to note did we note any instances of non-compliance with applicable laws and regulations related to to your financial reporting as well as do we in run into what we would call either a material weakness or significant deficiency in internal controls. and you actually have to report that out in this report that gets attached to your audited financial statements as well. Um, box four is an additional report that's required each and every year for for eb and for all Oregon municipal corporations. So, if you're comparing yourself and and looking at the audit reports of a of another public utility, if you're looking even in uh just north of us in the state of Washington, you're not

1:18:20 going to see a report like that. It's unique to the state of Oregon. Uh, and the state of Oregon requires that the your independent auditor as they're going through the annual financial statement audit, they're also doing some compliance audit procedures over certain state statutes. And a lot of the times where we're spending most of our time is where you're parking your funds. Are they in uh state uh or deposiitories that are approved by the state treasury? Uh where you're investing your funds, are those approved investments under the state statutes? Um and then your procurement processes. Are you following kind of all the uh competitive bid and and informal bid type of procedures that the state statutes require when you go out to procure goods and services. Box five is the additional report for the spending of those federal

1:19:05 funds and the compliance of that. Right? So that additional testing that we do when we take a look at those different uh federal programs um that uh are providing you with funds and you're spending those funds in the given year and making sure that you're in alignment with uh spending those funds in accordance with those underlying grant agreements. And then box six, we'll go through a little bit more of what's in there and the highlights later. Uh but it's called our communication to those charged with governance and it's a letter to give you a little more information as to how the audit process went. So on top of just did you get a clean opinion or not, did you have compliance findings or not, this tells you well how did the audit go? Did you run into issues? Did you have audit adjustments? Did you find errors along the way that got corrected in the final document, but did you find errors? Do you have recommendations for us going

1:19:50 forward that maybe aren't a material weakness or significant deficiency? Uh but are there best practice recommen recommendations and things like that? So a lot more information uh that's intended in that letter and that's something that's required on each and every audit that we do by our professional standards. Go ahead and advance to the next slide. All right, I'm going to pass it along to Ida Alvarado. So, you're going to hear from someone else for for a little bit from our team and she's going to talk through to start with our uh significant audit areas. Thank you, Keith. Can everyone Can you hear me? Okay. I just want to make sure my mic is perfect. Awesome. some of the significant audit areas that arose again as part of kind of our preliminary planning procedures and a lot of these are not necessarily just unique to EWE but kind of across the industry things that we focus on. First one being the work orders and work

1:20:36 order classification specifically. So we do kind of a really really deep dive on work order classification as of year end and whether or not a work order you know is still indeed being worked on and in progress or should actually have been closed prior to year end. So again, an an area kind of across the industry that we we spend a particularly a long time on really focusing kind of in the weeds in the detail on those items. As well as this year, unique to EW Webb, we did see the SAP conversion occur um as noted the conversion occurred December of 2024. So we were able to kind of do do some dual testing there when we looked where we looked at um you know internal controls for 11 out of the 12 months as well as then those controls in place subsequent to the SAP conversion really really

1:21:23 documenting sitting with everybody just kind of across the the board there. uh as well as then we were able to leverage our IT team to kind of come in as well and really also perform kind of their individual testing over the SAP conversion as well as the documentation in place and kind of the testing that occurred prior to even go live. Next up, we had um another area kind of as Keith mentioned, the single audit uh testing, especially looking at federal funds received, but then kind of really going into the weeds on those federal funds as well as looking at the allowable cost incurred and determining if if those costs that were were expense, you know, were indeed determined by the grant agreement in place. Uh as well as looking at revenue and expenses over power training. And then this year there

1:22:08 was the adoption of Gazsby 101 compensated absences. Next slide please. So some of the audit opinions and reports that were issued and I think he kind of really went into the weeds on a lot of these. Um but for the financial statements there was an unmodified opinion which otherwise kind of referred to as a clean opinion. This is exactly what you want to see on the financial statements as well as then the government auditing standards report noting no findings there as well. uh the Ogon minimum audit standard report. So that kind of MS report where as Keith mentioned we very unique to the state of Oregon. We also noted no findings there in our testing. Um and then lastly we had the single audit report there as well. Like I said we looked at kind of all the allowable cost. Um looked at

1:22:55 those expenses coming in how those funds were used and we did we had no findings in those items as well. Next slide please. some of our required communication to the board. So this again was also provided to you in in the letter but this is kind of a nice little bullet summary here is you know the the opinion on the financial statements which again noting an unmodified opinion as well as any significant accounting policies for the year which this year as I mentioned Gazsby 101 uh was a really big undertaking. So the adoption required management to evaluate all compensated absences offered. So this could include sick time or other salary related payments. Um you know so it's a if a sbatical was offered. So what this kind

1:23:40 of entailed was a calculation of that liability for that leave that hasn't been used yet or a leave that has been used but maybe not yet paid out. So you will kind of notice not only a new uh again the new significant accounting policy mentioned in this letter but also kind of that new disclosure in the financial statements as well. Uh we're also required to kind of know any estimate or judgment set set forth by management. Uh as well as if any audit adjustments or proposed adjustments were identified through our testing procedures and happy to report that we had none of those this year. uh as well as any disagreements with management which again encountered no disagreements uh difficulties performing the audits or any any delays that were encountered which you know there there were no

1:24:26 delays or there was kind of a push of fieldwork just due to the SAP implementation when compared to years past but once we had those dates kind of set in place it was you know smooth sailing through through issuance there as well as any audit observations and recommendations observed through our internal control processes. So, kind of as I mentioned here, this year was really unique in the sense that we were not only looking at internal controls for how they operate 11 out of the 12 months, but also really then focusing on kind of that last month and seeing how, you know, SAP controls were were operating for that month. But also it was, you know, a really cool opportunity for us just working directly with management and gaining a better understanding of their new controls in place and kind of their openness and willing to discuss, you know, kind of

1:25:12 the processes that they're they're still kind of outlining and and we're going through kind of through the audit as well. Next slide, please. Um, do you want to give a thank you to the e webb team? everyone is always so so intentional about, you know, wanting to check in with us, making sure that they're staying on top of all of our audit requests, as well as then providing those requests on a really timely basis. You know, we're able to continue to work through the audit efficiently because of of how quick uh responses are. I think also really wanting to highlight the transition to SAP. Uh it sounded like everything went incredibly smooth and that's, you know, not something we're we're used to hearing a lot of when people go through when uh organizations go through a big ERP implementation. And

1:25:58 so I just think it's a a great testament to kind of the talent that Eb has and how well prepared they were for this implementation, but also willing to kind of walk us through the whole entire process for the audit and and their patience there as well. Don't know if you want to add anything, Keith, but I was gonna say back back to you on the next slide. No, that's great. And uh wanted to take a moment here at the end and close out to uh let you know about a significant or some significant news at at our firm. Uh of course, and we've shared this with with some of your team members as well, and maybe some of you have seen this uh that didn't hear from us directly, but it's been out in the news as well. Uh we actually have a significant merger uh that just closed today, actually. So, I'm still getting used to saying this,

1:26:43 but as of today, we are officially Baker Tilly as Moss Adams um which we performed this audit under Moss Adams and that's what we've been performing this audit under uh previously. Our merger closed today and now we have merged officially with Baker Tilly, another firm that I think many of you might be familiar with as I know Baker Tilly has had some work that they've done uh and contracted with EW in the past for different projects. Um so very excited about this. I think this is uh really going to be exciting and help a lot of our clients including e webb going forward. Uh and you know for for me and I and being involved in our firm's energy industry group that serves power and utilities and that's where we focus our time. Uh Baker Tilly is a very industry focused group uh and firm as

1:27:30 well. And of course we were very familiar with some of their folks on on their energy side just kind of bumping into them at conferences and things like that in the past. But uh now they're we're all part of the same team working towards the same goal. And so we have a deeper bench especially in our energy group as well. Uh and excited to kind of bring that to to light to a lot of our clients uh as we continue to kind of serve the the same types of clients that we have in the past. We're not looking to change that or anything. Uh but really just kind of expanding what we're doing, have that deeper bench than we've got now and and having more much more scale than we have. Baker Tilly is kind of headquartered in Chicago um and generally uh located in with offices in the upper Midwest and the East Coast and down in the south whereas we historically have been west coast and

1:28:16 down into the southwest and into Texas. And so uh this really kind of gives us a combined footprint that is uh much more significant than what we had in the past um and makes us really a national firm uh with much more reach. uh so we can pull from experiences and um expertise that we've got in with individuals and that have clients on other parts of the country than what we've served traditionally and I think that's going to be really exciting uh going forward. So we just want to make sure that was uh discussed a little bit and uh we can open it up for for any questions on this or anything related to to your audit but wanted to make sure we went through through that as well because it was a significant change uh with our firm as of today.

1:29:02 right, that's it. I will open up the floor for questions or comments. Commissioner Brow. Well, thank you again for doing this. I know that we've commented on this before and and we've paired it down from an hour and a half to 30 minutes. I appreciate that. Just two clarifying questions. Um what's gas? What's steam and in the resource you power resource attributes? of hydro, wind, biomass, and steam. Is that gap? It's page eight. It's a 84,000 megawatt hours last year. What is stream

1:29:50 source blank? It's got to be a legacy name from back when we had a steam plant. You're carrying it for all three years. 22, 23, and 24. That's a a category we use for the international paper generation. That wouldn't be biomass because biomass is the next line. Biomass is the second category. I just wondered what is that gas turbines or because it's not in our portfolio. I'm just wondering what it's pretty significant resource that you have listed there. The IP generator would be the only steam driven resource that we have in our portfolio. But it's based on the size of it. Yeah. I mean that's huge. It's half the size of biomass.

1:30:37 Yeah. We we own the output of half of the IP generator. We have all of the output of the SPI generator which must be the biomass must be okay. All right. Thank you. Um, I'll take a must be. Um, wham, we got beat up a few years ago. We implemented the WHAM program and uh, work area management I think is the acronym and we spent millions and millions of dollars on that program and we had problems with it and it caused problems with the with the auditing and everything else. It didn't the way we were doing it wasn't correct. Um, what happened to that? Did it just disappear? Did it die the death it deserved or what happened? Not yet. Um wham I mean I I mean we spent

1:31:22 millions on it and and it was supposed to be the save all for for inventory and imple implementation and tracking and things and it caused us audited problems and I don't see it mentioned here anymore and just so it just disappeared. Wham did not disappear. It is where um it it is still our work asset management program. it is uh slated for replacement with an SAP product and we'll be beginning that work. Well, we're doing some of the pre-work now. So, um those discussions will continue throughout the year, but we're scheduled to begin that work next year. Is that something that we have budgeted in the capital? we we have done in the long-term financial plan and it was part of um it's been

1:32:08 part of the overall presentations that Travis Canab uh our CIO has been bringing to the board. Okay, thank you. That's all I got. Thank you. So, um well, thank you very much for the presentation and for the thorough report. Always appreciated and uh kudos to staff for the clean audit. I always look for that. It seems like it's become harder and harder to find burying the lead at the at the end. Usually see it at the beginning, but um great to see that it was there. Uh I am curious now in light of the new merger. Um we go out to bid every few years on a contract. When is our contract up? If anybody knows offhand and if you don't, that's

1:32:53 fine. If you can get back to me, um I'm just curious when we're going to have to go through that process again. And um just you know given the newness of the the situation here we recently extended their contract so I can't speak with certainty but it said a couple more years. I see that's what I was going to say as well Deborah. A couple more years. Okay. Thank you. All right. For me. Okay. Um so I have a couple questions. Um first off on the SAP uh is that a platform that you guys have used with other industry uh audits and have you found it to be uh helpful

1:33:38 and do you do you think it'll make the audit easier, better as you know as it's been represented to us as being this great new tool. I'm just wondering how you guys have interacted with it with other clients. Yeah. Yeah. No, that's a good question. No, we we are very familiar with it. We definitely have uh clients that that use SAP um in in a number of different industries, but definitely within this power and utilities industry as well. So, we have number number of other clients that that have it and use it. So, we're very familiar with it. Um in terms of does it make the audit easier, better? um you know always always tough when you go through a conversion you've got more uh systems and modules that are are coming online into SAP as you just heard there with with the comments on on wham uh so

1:34:25 there's there's more to come there that will impact the audit kind of during this conversion period uh but I think in the long run it makes things a little bit uh more straightforward for the audit because we just have one system that we're looking at right whereas in the past you've had different systems for all these different areas that feed into your financial system, right? So, you had SmartStream, but that wasn't the only system that we had to look at and understand the controls and who has access, who's given access, and who monitors that and all those things, right? What's the change management processes? We had to look at a number of different systems, right? We had to look at your on your on your payroll side and wham, of course, is a part of that. We had to look at your customer service and billing system, um, power trading with Allegro. I mean, you've got a number of

1:35:11 different systems that we had to take a look at and now that is getting paired down to to fewer and fewer systems that we're having to really test those internal controls on the IT side and bring in our IT specialists as well to take a look at those. So, uh I think that does make things a little bit more straightforward going forward, but again during this uh time of conversion uh there there's a little more work to do I would say during the audit. Great. Um and then my another question that I have is on the the extra audits that we incurred uh on the federal side this time, are those costs able to be rolled into the administrative part of the federal grants or does that come out of our I

1:35:56 mean obviously if you're having to do a whole another audit to meet these federal standards that's an incurred cost. Can that be put into the administrative side of the federal grants? So, we did incur the additional cost. Um, we we received large amounts of well, we have applied for FEMA grants and so they are pretty significant dollars. I I hear what you're getting at and we do weigh the costs of that. Um, different grants have different uh overhead applications, right? Okay. Yeah. I just wanted to make sure that if you know if the federal government says you have to incur these cost, you know,

1:36:42 it's kind of like from the state un unfunded mandates, right? The federal government says you've got to do this, but they don't give us the fundings to do it where whereas, you know, you can hopefully roll it into the administrative costs of the of the grants and the money that's coming in. Yeah. Where we're unable to, it does come out of our general funding. Okay. And then uh again, congratulations to the clean audit. Um I think that in the four years that I've been here, most of them have been clear. There was one that had a couple of little uh you might want to look at this. I think it was a number of uh work orders that were past due and that was I think in my first year that I was here. But it was

1:37:29 You are right though. Congratulations. And I believe that I had as as board president I had an opportunity to interact with the audit team to answer some questions. Um they called me up one time and we did a Zoom meeting and they said how are you guys doing? And I said oh they're doing fabulous. And so I I uh I thank you for the opportunity to interact and get get your take as far as the governance uh and staff relationship going forward. that I think that's an important part as well to to keep that in the in the link uh as far as going forward. I think it was helpful to them I hope and it was it was helpful to me to know that they were interested in the board's perspective as to the inner

1:38:16 workings between the governance and and the staff. So I appreciate that and with that congratulations on a clean audit. Um I don't know is this an action item or No. Any other questions or comments? Congratulations on the merger. I heard that there's like a 25% bonus to all uh employees. So, that's great for you. I I hope you spend it wisely. They're going to cut their audit fees by 40%. That's right. That's right. So, a lot of rumors flying around here right now. Thank you. Thank you guys. Well, thank you all. I appreciate it. All right. Good evening.

1:39:06 Okay, my bearings here. So, the next item is item number nine, ew webb billing and collection of nonutility fees. There is no background on this. Deborah, did you want to speak to it? The background material for this was sent separately to you all directly from Frank. And uh I'm going to turn the floor back over to you to manage some conversation around this. And uh potentially there were uh there were some potential motions if you wanted to take action this evening uh or at a later meeting and then we'll take that as staff direction going forward. Okay.

1:39:52 Well, I will start this out. The this has to do with a conversation that was brought to us through the city of Eugene and the possibility of adding a uh a city service fee to our bill. We were approached uh to look at the the possibility of what that would mean um and if we would be amanable to that. It would be an unprecedented uh fee on our bill. some of the bill the the things that we are are putting on our bill right now for the city of Eugene are uh codified in our our working relationship with the city of Eugene. This would be outside of what is codified and so last month we didn't know where this

1:40:39 was going to land. Um, the city of Eugene since then has come up with a an option that will increase their storm water fees that are put on our bill that we have no control over. Um, we are mandated to put those on there. And as of right now, there is uh still a possibility that they may ask us to put it on there, but I I from my feeling is that possibility is is fairly remote at this point. Um, we have had some information from our our staff as to what the um implications would be if we had this put on our if we were to put this on our bill. So, at this point, there are a couple of three different

1:41:24 motions that are possible for us to put forward. Um, and I'm just going to put it open for discussion. Basically, the discussion that isn't tied to a specific fee or uh proposal at this time. It would just be is this body willing to put something on our bill that isn't a mandated EP. So, Sonia, I'd like to move that we table this until date uncertain since there's nothing pressing and a future board could just change it. I'm totally against taking can down the road. I've talked to two city councilors. They want to know sooner

1:42:09 than later. Councelor Yay said in public session, I wish he would have told us because they and we've done all the background work. We've got everything done and and and for me it's a it's it's a no-brainer. I I am totally against putting a non-ew fee on the e-web bill. And I'll quote what what Mindy said. Overall, I don't support putting an unrelated fee on our bill. I feel it adds too much complexity to our system and may negatively impact customers. She goes on and on. I read this thing that Frank said that time of use pilots could be delayed or postponed. Our scheduling um delayed or postponed. Customer prepaid poem delayed or postponed. I mean, this thing, why they we're going to get the heat already? Because ew web the e-web bill is going

1:42:55 up and it's going to continue to go up and I don't see where this would ever be appropriate. And why would we kick this can down the road? We've done all the background work. The council, at least the the people I've spoken to, the counselors, they want to know. And I can't ever conceive or or comprehend me or, you know, others maybe of putting this on the bill. You heard tonight how tough these bills are. And even if we put it on the bill, you they've already said legally we cannot turn somebody's utilities off because of it if they don't pay it. So I'm I'm not for delaying it. I want to get this over with and move on. I mean, we're already over schedule for the July meeting. So if not now, then when? So my point is that whether we vote for

1:43:41 it or against it, it's not going to move forward most likely. Um, and so I mean for me it's I I think it's a moot point and if we're not going to do do it anyway, um, a future board can just change it. So we can say no tonight and that's fine. I don't think it matters one way or the other. I don't think the council's going to pull it back up. I think the indications that we've given them already moved the needle and it still moved it in a way that wasn't ideal because they just jumped up the rate on the storm water fees which is still going to impact our customers. So that didn't help either. So for me, we can go on record and say, you know, vote it down. I'll vote it down, but it doesn't matter either way. I mean, from my perspective because again, a board in

1:44:26 the future can come back and change that policy because that's what the board does. Tom, Tim, thank you, Chair. Yeah, I uh the I mean, this has been a topic of discussion for the majority of my term already. Uh and I know that we have not had a very significant conversation about this because the city of Eugene hasn't really made a final decision on whether or not this is going forward. It's always been uh a a potentially pull it from the ballot or to change it with another uh or do something different. and something different has happened. I still don't think that we have the appropriate information to be able to make a decision on that specific fee in at this moment, which may or may not be

1:45:12 on the ballot, but we know that the city will be making that decision before they go on break in July. And so, um, and even think at our July meeting, we might not get this timing quite right. And so I I'm personally not in a position to be able to make a decision on the fee itself. But I think Commissioner Brown, you bring up really good questions of could what would this look like? How could it affect our billing? And I think from my perspective that's I would support directing staff to explore if that is a possibility, what that could look like, what it may entail to if there is an additional fee of some type to be able to have a clear distinct yes or no. this is a thing that we could do. I think that I agree with Commissioner Carlson that if we put in a policy of no fees,

1:45:59 not never, I think that that sends a challenging message and will also be a a a wow, I got a full hour to chat. um uh it will send a challenging message and also be a very uh administrative responsibility I think for staff to bring that forward if there's another fee presented or or some type I I we just don't have I think the appropriate information on this fee in particular and I'm not in a position to make a broad sweeping statement for our board that no future fees can even be considered at this moment I I think that that's shortsighted Um, and I would like to ask, I'm not

1:46:44 seeking an answer from staff, but um, well, if you have it, but the question that I have that I haven't really seen a response to of this, but when has the last time, if ever, an agency, government agency or public utility of some type has requested non-charter uh, the city or this e web to put on a fee on our billing? Um, has this happened before? Seven years, I think. Not a non city fee. There's probably been requests for information about it. The

1:47:29 idea has has been floated, but a request not in my not in my time here either. I I think that fuels my decision not to make a broad sweeping statement against a fee wholesale because this is not a consistent nor a common proposal that gets brought forward to this commission and I would support future commissions to being able to future boards if that's all of us um but future boards to be able to make that decision themselves able to make a fee on a this is not public discussion Um,

1:48:20 Um, had a proposal come to us from the city of Eugene to put a fee on the bill, I would have considered the merits of that fee and the cost and benefits and and and how that went to us. At this point, that's not really the question that is is before us tonight, especially in these motions. Um, what what I see in these motions are us deciding as a board whether or not any type of of outside bill is appropriate to go on our on our bill. Um, and until I'm until I am uh presented with a hard and fast option

1:49:06 that I can weigh the pros and cons to, I would have a hard time setting a policy that no, we don't want to do that. Um, so I motion number one that we develop a policy I think is going a a bit too far for me personally. Um, motion number two is getting closer to where we're at. Um, I'm not sure if it would actually get to where I'm at, but I think that that motion number two would send a message to whoever is out there to say, "Hey, if you want us to look at this, you better have a really good reason why." and bring it to us and be able to articulate that uh to this board

1:49:52 or whatever board that is in the future. Um so the difference between a policy and a resolution I think is where I would land. I would land more towards a resolution considering where this one fell. And I I think that the reason that I could support the resolution way is for other entities, whether it's the city of Eugene or whoever, that they know going forward that it's not just a default. Oh, let's Ew Webb will put it on the bill because that was out there in the ether for a year at least. Oh, Eb will will build this. We'll put this on ew's bill.

1:50:39 If we have a resolution that says we're not going to put something on the bill unless you can really show that it's not going to impact our customers and our our organization, we won't even consider it. Then then that sends a message to those people that if there's entities out there that are trying to raise uh revenue that this isn't we aren't the the collection agency for new revenue. Um, so I would lean towards the second one. And as far as the tableabling of the motion, I think that that does send a message to the community that yes, we're a partner with the city of Eugene. We want to be a partner with the city of Eugene, but we have our

1:51:25 own issues, problems, and things that we want to accomplish as an organization. and a billing agency isn't at the top of our of our list. I would have been leading the charge very hard on this had it gone the other way and that there would have been services that would have been cut because of what what went forward. But I think a a uh a compromise was reached. It wasn't the best but it it maintained some of those services. If they had come to us and said, "These are the services that are going away." I would have had to think long and hard about that and and weighed those balances as to what how that's going to affect this organization as opposed to the others.

1:52:11 I'm not in that position now and I don't want to have to be in that position going forward. So that's why I lean towards the resolution and attitude. Mr. Brown, so for me for us not taking a position, we're saying we're not willing to say no. So, we're opening the door for them to come back. To me, you look at the the services they restored with this. I don't want to be any part of it. They first they said it was a fire fee. It had nothing to do with fire. Now, they say they they raised a storm water fee, but how did they restore the library and Green Hill with a storm water fee? Has nothing to do with storm water fee. You know exactly what's going on here. I'm not going to use the the term that that that. But for us to turn around and say we're willing to risk post-launch customer and finance system bug fixes, standardized financial

1:52:57 reporting, customer interval data, customer prepaid programs, we're willing to risk delay uh and and postponement of all those programs that we've been working on for years to implement in our new billing system because of the city's desire to potentially do this. I'm I'm I'm willing to stand up and say no, you figure out how you collect it yourself. We'll help you. We'll we'll send a separate bill, but not on the e-web bill because once we open this Pandora's box, it's done. How do you think we got to 6% instead of three? Go back and look at it and and try and reverse it. Can't do it. I'm I'm I'm not afraid to stand up to the city. I don't care. I mean, I do care. I'd care about our relationship and everything else, but I mean, we're we're good partners with them. We're

1:53:42 taking on their fire hydrants. We're doing all this other stuff. we're their largest single resource of of revenue. But to turn turn around and not give them an answer and to open that door to say, "Well, the door's still open." That's the message I think we're sending by by not taking a position and just saying no. You know, we we've got four things on there. We're already getting the eb bill is going to go up because of the storm water fees. And uh and it's going to it's going to go up 23% this year, not 18 because it already raised 5.7% and it's scheduled to go up 5% a year for the next five years if you look their fiveear cip. So um to me I'm it it's uh it's it's pretty straightforward to me and that that u and I echo what Mindy said. She said it best first one

1:54:27 months ago when she said the question is whether or not we're willing to put a non ew webb related bill charge on the e web bill. If if we do let's just stop calling it an ew bill. Let's call it something else a general fund bill because that's what it's going to be because that's what exactly this we're doing. And so I just want to keep it simple because we got so much pressure on the e-web bill now um is what it is. And you know, even if we adopt a policy, we can change any policy we want. So that's not bothering me a bit. And so, but why not give them a message and say no, Tony? Well, I already went on record before saying I would say no, which is I think, you know, part of the reason we said we're

1:55:12 not going to move forward with it as it currently stands. Now, for me, the reason that I supported looking at it is that I think our fire is critical service, and there were some services that we were looking at, and we have not done any of that. We're not taking over their fire hydrants. That has not been something that has been decided, though, it desperately needs to be because it is a critical service. This community desperately needs, especially in a time of climate change and the the dry fire seasons that we've been having. We need to have critical services that are maintained. and I trust our e-web staff and the processes and the engineering work um that they do to figure out how to do that. And that's why I left the door open when it was originally sold as a fire fee to protect

1:55:59 that critical service. I really I thought yes, we absolutely need that because we need that as a basic function of our community. And that's why I said that I wanted to support it. Now, all these other things changed and you know, they made a different pathway. I'll vote tonight to say no to it, but I don't think it's going to change the outcome if we said let's table it because I don't think they're going to come back and revisit it personally. So, if that's the will of the board to say no for a time certain, maybe the time certain for when this board changes hands. Um, you know, I mean, we have two commissioners that are up for vote in two years. Um, so we have potentially a new board at that point. Not necessarily. I mean, people can stay

1:56:45 on, but I'm just saying that that is the next lynch pin for when we go. I would support that, but I I think this back and forth and I'm very frustrated that we've been put into this situation to begin with. And I I think even if we said no from the get-go, we would get more pressure to change our minds. So, the city has changed. They have a path forward. It's going to impact our bill no matter what we do. Um, so if it's the will of the board to say no tonight, I'm fine with that. I just want this conversation to end because I don't think it's productive anymore. Yeah. um I think that this the conversation around the fire fee I think is is

1:57:32 barreling towards inappropriate at this point until a vote has been made. We don't have a decision on whether or not it even will go forward. And I I mean we can talk about the critical infrastructure. We can talk about how challenging it was that the city approached us um in a a pretty direct way and has been changing sort of perspectives it seems every month. Um but that I think is not a and that is not a a conversation that I am interested in having. The pitch, the concept itself that the city brought forward was a pitch to from my perspective and I was not on the the commission at this time but um sitt in the audience. It was a pitch to stretch taxpayer dollars as they would have had to use some of the funds from their uh

1:58:19 from this fee in order to build up their own administrative paying system or or payment system. And so we already had one built in. It's not a duplicative effort. That's how I heard it. That's something that is intriguing to me. Now, I recognize all of the other challenges with the fire fee, including the approach of that, but I'm not willing to declare a a persona nonratus or whatever uh of of total fees or even make this conversation about um a a time certain type of fee because I think that we do not have an ability to know what the proposal is or what may be proposed uh to us. And so I don't know if I'm

1:59:04 interested in having a a fee put on our billing system, but I'm interested to hear what a proposal might look like. Um, and I think that we are heading into a very very challenging economic time in which we have to rely on our local partners more and more every day. And I say this with the the federal administration that is making broad sweeping cuts across the board. We have a state that had a $500 million budget uh shortfall uh forecast that just came out. Lane County announced a what $6.3 million budget cuts. Eugene is a we it is budget cut season and having the door open to being able to save taxpayer dollars is of interest to me.

1:59:49 So I I'm I'm vehemently against the the first motion that's here. I'm very disinterested in the second motion. Um, and I think I would I'm choosing not to make a an alternative proposal, an alternative motion to direct staff to explore this, but I think there are still a lot of questions of if we could what it could look like um that we just don't have answered. Uh, so at this time I'm at this time I'm I'm I'm I'm also disinterested in having a fire feed conversation, but um I think that there's there's a lot of ways we can support our community. So for a little perspective as somebody who

2:00:36 was sitting in the room and some of these in the revenue committee at the city of Eugene and and where some of these numbers bied about and and how e webb came to the the forefront as a a possibility was initially it was it was bied around that it would be cheaper for e webb to do it as as some uh as eb staff looked into it and we realized the true cost not only of dollar cost but implementation of time it was about equal as to whether we would bill it. It be the million to a million and a half six to nine months to implement it. That was the ballpark that was put to the revenue committee as to

2:01:21 what it would cost for an outside billing company to do it. So cost and time are going to be about equal. the the cost that and that's just dollars and times that doesn't include what would be the opportunity costs that we would be losing as an organization by implementing it. So to me that kind of also swayed it when I when I asked when we directed staff last month to go forward because before that it was just kind of informal banter. Oh what could you do this? Oh maybe we could if you did it by the uh you know storm water rates and this and that. And as we dug in, we found out that no, it's really much more complicated than that. So implementation and timing are about equal to a separate billing type of

2:02:07 thing. So with that said, the second the second motion here, and this goes to you, Commissioner Brown. It says that we will not that we will direct the the general manager to that limit the use of e web billing and collections to services of electricity, drinking water, and other services required by city charter or applicable law. And then we could say until repealed. And that would give us the opportunity to say that gives I mean there those were the three things, a time period, an expiration date, or until repealed. And I would lead I would lean on to the until repealed in the

2:02:53 second bullet point. The second same as the first. No, the first one is a policy. The second one is is a is a what is it? Uh yeah, a resolution. So it goes changes to me resolution policy is highest level. Resolution is is a is a a less direct and I would I would be in favor of doing that and say unless repealed. And if somebody comes to us with a solid argument that says the fire department is going to be cut this much and this is the way you can do it and we can have that conversation that would give a board the opportunity to re repeal that uh resolution. And so that's kind of

2:03:38 where I'm landing on this because that gives direction too. So so that they can't so that people don't look at us and say, "Oh, well, Ew can do it flippantly when when we know the the the devil's in the details." So yes. So in practice, a policy and a resolution seem like the same thing to me. I mean, in in terms of staff either do the thing or don't, um, it it seems to me that they're very similar in terms of their overall impact. Deborah, can you Yeah. help? I actually wanted to The way the second option is written is for a specific time period um for really to

2:04:24 address those opportunity costs unless it's reappealed. So it is asking to in insert some sort of a time period there and then you'd have the option to repeal. Same with motion number one. This that could be repealed, right? But the main difference between one and two is one is just flat. We don't do this unless the board votes to change it. Number two is we are saying for a time it's on hold and we're not willing to look at this, right? Yeah. And it's I mean whether it's a policy versus a resolution, the impact is the same. So for me it's kind of semantics at that point. You're either saying

2:05:09 we're not going to do it for a certain amount of time or you're saying we're period we're not going to do it and then they would have to come back and convince the board to make the change. for me. Either way, it honestly it's again for me it's it's uh kind of the same thing because at any point in time we could come back and choose to vote on it again. Um so I would like to we have a motion on the floor and I'd like to um call to vote and if we fail that then we can look at our other options but restate the motion to table to date certain table to no date certain. No date certain no date certain. We just table it. It's not debatable.

2:05:54 Okay. All in favor of tableabling the motion say I. I. Post. Motion fails. Okay. So, may I offer a compromise? Y. So, I'm willing to jump on number two for two years because that's when the board rolls over. But I just I want to caution you about how this can play out and you're setting yourself up because if you turn around and say we're willing to consider a fee and Tim I'll talk to you about whether or not that was really a fire fee. Why do you think the firefighters never came and said we want this? There's nothing 2 million out of 10 was fire. Rest of it was all general fund. But that's an aside. Um because uh if you turn around and say we're willing to consider this, so they're going to

2:06:40 come to you with something. They're going to defund the police. They're going to defund the fire. They're going to defund all that and then put it on you. If you don't put it on the bill, it'll be the ew webs fault that it didn't pass. The critical stuff and and so you're going to be forced to do it and you're not I don't think you're going to have an option. And that's what I'm afraid of because that's politics and that's why I was adamant about getting there. But I'm I'm willing to go with number two and uh and for for to to date certain you know for a time period of two years unless previously repealed just modify that just say for a period of two years or you know

2:07:39 I don't know if two years is enough, John. Well, they may they may order six years. So, let me and let me tell you why. I I I think that if if that's if what we want is to not be considered as a as a revenue collection option in 2027, there's going to be a vote on the community saving payroll tax. And if that for some reason fails, they're going to be scrambling for any kind of revenue that they can get. And so if we put this out there till 2027, I think we you it would behoove us to if we want to take it off the table, take it off the table for a longer period of time. That's just my my I'll accept a friendly amendment or I'll

2:08:25 withdraw that motion that Deborah, you wanted to speak. I did just want to add that in that in that motion it speaks to organizational priorities around modernization and we're about four or five years out from completing our roadmap on our modernization. So the goal would be to so we don't risk losing everything is that's on organizational impacts. The goal would be is is to limit adding this to the bill until we can at least implement, you know, time of use and all these other things that we're risking by by putting some non-ewell on the bill. So that's that's why you say four to five years would be an appropriate period of

2:09:10 time. If you're looking to move it outside of the uh outside of the range in which we will be delaying our own modernization, that would be the time frame. Okay. Second. So I would say four years. Four years work. Unless unless repealed and unless repealed. Okay, I can do four years, Tim. Yeah, I'm opposed to this. I think it sends a bad message. I think I think what the pitch was of this specific fee were specific services in our community, but if there are other critical services that directly affect e webb such as SDC's or other other

2:09:56 issues, I don't want to close that specific door. Um, a question that I would have would be, would do we contract out our billing? We have third party providers. So, we have third party providers. So, let me give you a hypothetical. If the if the city came to us and said, "We want to implement a new fee and we want to set up a billing system. Could we help them facilitate sending out their own bill through our third party?" You know, just say, "Hey, we've got a relationship with this

2:10:41 billing agency and and this and that." And so it would be a total separate bill, but maybe some of the administrative costs or whatever could be could be saved by doing it that way. I don't know if Julie is sitting behind me wanting to chime in. Um I mean, we could make an introduction. I think anytime you're going to use some of our data to help that along, right, as a baseline, that's where we get into the difficulties of having two completely separate collection strings, right? Okay. And and that's just something that I'm thinking. I mean, again, as far as working with with our partners at the city, our our

2:11:27 chartered mom and dad basically because that that they are they do sign off every time we want to get a a bond, right? They have to they have to agree to us to to do it. So, in that sense, you know, anytime we would have an opportunity to work with them, not necessarily putting it on our bill or whatever, but being able to help facilitate or do those types of things, I would I would encourage us to keep that line of communications open. Um, because I think at some point if they do come up with another revenue stream, they will probably end up having to do a billing thing. That's what they did do when they did the community the payroll tax. It was it wasn't done through the Department of Revenues. They set up their own contract with MUN Revs and and

2:12:12 and it costs them about a million dollars a year to implement it. But that's the cost of doing business. I think we have one. So as of right now the motion that I have heard is motion number two um with a time certain of 4year period and unless repealed. Is that what the people on the floor feel? No. Yes. Sonia, go ahead. I'm going to vote for it. So, I hope we can end this discussion because again, any board can come back and bring this at some other date and we can open the whole can of worms back up again, but I would really like to stop talking about

2:12:57 it at this point because the city, I don't think, is going to move on it. They've found another path forward. So, I feel like we're arguing about something that they're not even looking for us to have anymore. So, okay, let's vote, please, Tim. Yeah. And I'll just the last thing I'll say on that is I I agree. I think this sends a signal to the city that we we tried, but it's just not going to work for us at this this date in time and uh that gives them a clear signal if they have something going forward that this isn't the avenue for billing. So with that, I will call for the vote. All in favor of motion number two with a four-year time period. So we'll say

2:13:42 July, end of fiscal year. So that would be good. July July uh 1st of whatever four years. July 1st, 2029. Yeah, let's do it. June 30th. That's the end of the city's fiscal year. I like that better. Yeah. Okay. All in favor? I I opposed carries three to one. Thank you people for all your work on that. Um it's time for a break. We are five minutes. I don't. Thank you.

2:25:25 I'm going to move on to item number 11. But before that, I just wanted I was asked by staff to just clarify what the motion was and uh the the makers in the second. So, I'm just going to go ahead and read the past motion that we just made. give the organizational uh motion limit e-web's billing collections for a specific period. Uh, I move that the board direct the general manager or designate to develop a resolution for board consideration limiting the use of e webb billing and collection services to electricity, drinking water and/or services required by city charter or applicable law until uh 6:30 2029 unless repealed. that was made

2:26:14 by Commissioner Brown, seconded by Commissioner Carlson. There was a friendly amendment that changed it from two years to four years by uh Commissioner Bowski and that passed 3 to one. So, just a clarification for the record and people who were watching and didn't have the opportunity to see the motion that was in front of us. Um John, yes, sorry. Um so the motion was then to make a resolution. We can't just do that because I thought we just did it. We didn't need a separate resolution, but the way you just read that meant that we had to direct staff to then write a resolution that we'll then have to vote on again. I didn't think that that's what we voted on to be clear.

2:27:03 That was what the second when we said we will I I just want to know do do staff actually have to write then a resolution that we then have to vote on it? That does say staff write that was not how we that was not how it was proposed. Did you intend it to be proposed as staff have to write a resolution or we just Yeah. My my proposal was my proposal was to follow the guidelines outlined in in option number two as commissioner indicated and that does include uh directing the general manager designate develop a resolution for board consideration but we get another look at it. I mean it can come back on a consent calendar. Resolutions always come back on consent calendars. We could have on

2:27:48 we can have it on consent uh for July. So then it would come back as an official resolution with a resolution number. Yeah. Because I'd like to note that we're already over time for July's budget. We're maxed out on time. We're going to be here till really late in July without adding anything to the agenda. Yeah, I think it going back to consent. Back to consent. Does that work? Yes, it may. and and and to me that makes me feel a little bit better because Commissioner Slothburg will be here at that time and would also have an opportunity to comment if she felt it was appropriate. So, okay, let's move on to the next item which is the CIP plan and priorities.

2:28:38 Oh, that's me. Good evening, President Baroski and commissioners. For the record, I'm Deborah Hart. assistant general manager and CFO. With me is Karen Kelly, our chief operating officer. We're here to talk about the assumptions and priorities uh in the capital plan uh that will feed the long-term financial plan. our agenda. Uh we'll we'll go over the planning process and how the board fits in uh to that process, our business and economic forecast and assumptions, touch a little on some of our concerns as well, our investment priorities, some of the challenges and risks that we have in our capital improvement plan, and leave time for question and discussion. There's no requested action this

2:29:25 evening. It's about getting your direction. So, the planning process is driven by the strategic work and prioritization that the board and management uh engage in. The guidance that management receives tonight from from you all is what will feed the capital improvement plan and the long-term financial plan processes. These will provide a long-term view of the financial impacts that inform near-term decisions which then leads us to the annual budgeting processes, the annual revenue requirement and the cost of service analysis. From that work,

2:30:11 management will then develop budgets and price proposals for the board's consideration. So, we're here today in that green box. uh bringing our economic assumptions and investment priorities for the board's discussion and guidance. We'll be back here next month uh with the draft CIPs and the long-term financial plans to share with you all preliminary results that are based on the guidance that we get here this evening at the July board meeting. Uh we'll be seeking direction on business and economic forecasts as well as the 10-year capital investment plans which will be used to develop the upcoming 2026 budgets and rate proposals for

2:31:06 fall. Per board policy and consistent with the EO1 projects are categorized by two types. Type one projects are defined as general capital renewal and replacement. These are typically routine compulsory to maintain or improve system reliability and cost less than $3 million. Type two projects are defined as infrastructure rehabilitation and expansion. They're typically discrete pro um projects of replacement enhancement or expansion that are multi-year and greater than 3 million for the life of the project. To prioritize which projects are to be included in the CIP, projects are classified as

2:31:51 compulsory, strategic or riskbased. Compulsory projects are required work with specific timelines such as new service connections or the replacement of failed equipment or infrastructure. Strategic projects are aligned with the strategic plan. Um, examples of those today would be Carmen Smith or the second treatment facility. And riskbased projects are driven by asset management plans and principles, reliability and resiliency goals and our customer needs. We have a series of policy uh assumptions. First that the annual spending will be um balanced such that we have the resources within that year.

2:32:37 Uh second that we stay within board financial policy. So those are those metrics that you touched on um President Barovski in the reserve transfer. And the third is that we have capital reserves set at our yearly depreciation amounts. In uh earlier this evening in the correspondence on reserves uh we did recommend that the electric uh reserve go up to 27 million to reflect the changes in depreciation that we're seeing. So that's in the financial policy that we shared earlier. Uh we do uh uh tie labor escalations to inflation factors and labor market comparators and non-

2:33:25 labor is assumed at 2%. With persistent pressure in construction, capital inflation is assumed at 5% for the next two years, four for the next two years before it goes to three for the duration of the plan. And the lines in the chart represent compounded inflation rates for construction projects with blue being what was experienced in the market and orange being EW's planning numbers. Um investment rate is one of the levers that um the board can give some guidance related to the trade-off between expenses rates and results like

2:34:11 reliability and financial metrics. Historically 2.5 times the 10-year average annual depreciation amount provided a reasonable balance between reliability and affordability. In 2021 though, the board did support increased spending rates in both water and electric to support strategic projects and replace aging infrastructure at a higher rate with a goal to increase resiliency and reliability. And with that, Karen. Okay. So, I'll be covering um what our investment priorities are for water, electric, and shared services, as well as covering what the risks are that we're looking at for our capital plans. So, to start with electric investment

2:34:56 priorities, we're currently meeting our age of system target at 55% and have planned capital investments to reach the goal of 50% by 2030 while staying below an investment rate of 3.0 for our compulsory and riskbased projects. Drivers for these particular investments include the Leeberg Canal near-term risk reduction measures and balancing that work with the longerterm decommissioning strategies. Also included our dam safety compliance, specifically meeting the many and varied concerns around construction safety with the Walterville forbay seepage repair and trail bridge fish passage. There are a lot of unknowns still with these projects that could um could change things for us. for transmission and distribution improvements. I want to call your

2:35:41 attention to the photo that I took last week out at Danabo substation. The work to be done is a pre prerequisite for the rebuild of the Jessen substation, which is the case with much of our capital work. There are prerequisites there that that things have to go in certain orders in order to make the system um still function while we're doing upgrades. And for at least the last decade, probably much longer, we've been battling aging in infrastructure and chasing that dream of proactive uh improvements to reduce our reactive repairs. We are starting with substation rebuilds and upgrades because they are the most impactful to the community from an outage perspective. Also considered to be the biggest bang for the buck uh benefit per dollar. Each substation supplies three

2:36:26 to 5,000 customers and they will see a benefit of avoiding substation trips as we modernize and improve those systems. However, on the strategic investment side, specifically in meeting our requirements negotiated with the rellicensing of the Carmen Smith project, we have uh been pushed a bit above our investment target in the strategic area. Moving on to water, our water investments have remained steady, showing age of system at 39% which is by design following investment strategy laid out by our master planning process. We are slightly above target for the investment at 3.2 times the 10-year depreciated amount for compulsory and riskbased work. Investment drivers for this work include our base level water

2:37:11 storage improvements following the distributed storage strategy and the required replacement of College Hill. Transmission work includes revolving hydraulic constraints by connecting up our resilient spine. Also however on the strategic end um investments necessary to build the Wamtt River treatment plant has pushed us well above the target investment. In addition, we have investment priorities that we're still managing with AMI e webb enterprise solutions and the burdlesen property development all of which have impacts to both the water and electric capital plans. So moving on to our risks in the plans. Um you can see on this slide we have issues around inflation, timing of

2:37:56 the projects and the capacity to do the work. All of those issues impact the results, our rate trajectories, scope tradeoffs, and our resource needs. We will need guidance from the board on balancing the risk to quality, reliability, and resiliency of our services with what it costs to bring those values to our customers. Because of the large-scale projects early in the CIP, a 5% inflation rate assumption for 2026 construction translates to about 3.4 million in water and 4.9 million in electric. That's roughly a 9% rate impact to water and a 3% rate impact to electric. Bondi financing aspects of the CIP enables us to spread otherwise immediate impacts of some of our projects over time, not all.

2:38:42 For electric, changes in the CIP, you can see in this chart, are mostly related to Carmen Smith relicensing projects. Specifically, delays and upcoming deadlines are putting pressure in the early years of the plan. in for water. You can see in the chart changes in the CIP is mostly due to increased cost on the second source projects. Our capital plans need to continue to have flexibility as we're dealing with a variety of risks that persist and have intensified in terms of impact to our operations. In fact, uh earlier in the slides, I mentioned Dana Bau substation work. That project has been plagued by supply chain issues recently. The team is attempting to remedy them through shifting work at the station out of order. So out of the normal process, but also having the

2:39:29 contractor supplying the switch gear, which is critical to the project timeline. So they're they are trying to mitigate for this. Any delays here though also delay that work at Jessen. And you can see the rest of the risk that we're juggling listed on this slide. This is true again. Every year we have these um struggles, but constantly trying to balance them again between what value these projects bring, what we're trying to accomplish as we set forth in our um capital plan expansion expansion in 2021, trying to balance uh the costs that keep rising. Um what will these projects cost if they're delayed now, 10 years from now? History is telling us uh maybe they may become even more unaffordable. So those are some of the risks and now back to

2:40:16 Deborah really back to you President Barski where we have a couple of questions up here as conversation starters but we're here to hear from you where your um what areas of risk uh you want to prioritize making sure we're mitigating uh and what are higher and lower priorities. ities to you all and how affordability plays in there. Great. Thank you for the presentation. I will open it up to commissioners for questions, comments or answers to some of these questions that are very difficult. So, back to page 30 or slide 33.

2:41:08 Okay. So, we're talking about the age of the system. Is that measured by the value of the asset like the dollar asset value? Is that how that's measured? Okay. So then when we have a a massive project that gets redone, it has a a skewing impact on the overall like we were closer to that years ago and then we had to do these other big projects. So over time that will ramp back up again as those uh projects that are are skewing it go through. Right. Yes. The math is that as we put a big service a big project into service that does bring down that age of system and over time what we look for is to

2:41:54 maintain at an appropriate rate but it will wax and wayne depending on what projects we put into service. seems like it's really hard to measure an overall service when you're looking at, you know, different assets that have different lifespans. You know, if you want the average to be a certain thing, I mean, you have to recognize that some of your assets, you can't push that any further past that that life. I mean, like we saw with College Hill, I mean, it was leaking. It was a safety hazard. It was not seismically sound. We can't, you know, the state said, "Hey, you can't run this anymore." I mean, there there are certain things that we can't um do anything about. So, I I just it's just a comment because I think people see that, oh, we're at 60%. Well, we're way overspending if we're down at 39%.

2:42:40 But that's really not what the math behind that figure says. And it really is just one point that we look at to make those decisions. So, um yes. Okay. Um and then can we go back to the other questions? Yeah, just before we do that too, I want to mention that the the master plan for water by design, we did a lot of work at Hayden Bridge and that did bring help bring that age of system down. So, you know, and then the the idea of of course may not be the reality in the end, but if we were to move towards that second water treatment plant investment, you know, we're going to have to push out a lot of the other um renewal projects that we would have otherwise done. So, I would imagine you will start to see that number come up.

2:43:28 I guess building off of that too, I'm I'm assuming that our our value in the age of those product, I mean, it's it's depreciated, right? So, maybe you have a project that's already been mostly depreciated and it's still in there, but the replacement value of that is massive compared to what? So if it's in the 20, you know,60 or not 2060, but $1 1960 compared to what replacement cost of that project would be, it's drastically different as well. Correct. Because it's in so it's an imperfect measure. Uh and again one thing that we use to look at the health of our system and it is skewed by large projects

2:44:14 coming online and certainly things are more expensive than when they were put into service. Yeah. It almost seems like we should have the value of that aged product in today's dollars versus what our you know current age of product is in today's dollars. So that it was a little bit Anyway, not going to get into that too much. I just wanted to comment on that because it looks drastically different. Okay. Um the last question slide. Okay. Um you know, for me it's it's just really challenging because it's all this balancing act. We have we were we were trying to mitigate

2:44:59 costs and risk by implementing a number of these projects and and putting off some of the projects. Our water second source water treatment plant seemed like it was, you know, a a valid solution to put it off so we could try to work with our partners next door, our neighbors next door, and they didn't want to work with us. So, we put it off and now it's going to cost almost double what it would have seven years ago. Now, you know, none of us has a crystal ball. We could go into a recession and maybe the cost would go down. Really don't know. The the the the thing that we do know is that we do want to keep things affordable as possible, but we do have a aging infrastructure that our community relies on. And we can't service our public without these projects. They they are aging in spite of the fact that that says 39% when it's

2:45:46 really heavily skewed with, you know, different data. So for me um I think we need to we need to look at the projects and where possible if there are areas where we can push out to deal with supply chain issues that might be more of a uh short-term situation that we see if we can push some of those projects out until the supply chain issues are not an issue. um to to try to deal with that because that that's going to have an inflationary pressure immediately on the the prices that we're paying. Um but the projects as a whole I think are still valuable to move forward in terms of our

2:46:32 second source, our substations. We don't want to lose the momentum, the staff um uh knowledge behind building those. I think it's it's really valuable to have those substations buil built out in succession because you have you know once you do something you can do it better the second time you learn all those lessons. I think it's very valuable to do them sequentially so that we don't lose that staff knowledge. It'll just get more efficient. It'll get better for them to work together to get that those projects done. So those are that's my two comments and I'll leave the rest to others. Thanks Mr. route. Yeah. Help me understand non- labor escalation 2%. What is that?

2:47:18 That's the escalation that we're building into next year's budget in the long-term financial plan for things that are not labor and not capital. Can you give me a definition of what? Just give me an example. Like our cleaning service. Okay. Okay. So that's more operational rather. It's O andM costs. Okay. And so your inflation projections on these, were they made before we've had this tariff game because of a lot of our products are bought from overseas? they were made in the midst and we look to market indicators on for I mean like 50%. If if if there is a 50%

2:48:06 tariff on steel then yes we'll see an impact bigger than 5%. Yeah. And that's my that's my concern. And so, um, just before I tell you what my priorities are, are our sad and safety rates of 95% or above on both water and electric. Uh, I'd have to go look at the latest um metrics. Mike and Tyler are in the back. They might be able to speak to it. Go ahead, Tyler. Uh yeah, we're we're within our five-year benchmark when we track every year and then we're on those well below our kind of peer utility benchmarks. Not sure what the 95% is referring to, but but based on compared to every year. Yeah, comparative because I know that the first 95% of reliability costs one

2:48:53 thing and that last 5% cost Oh, I got what you mean. A ton more and I just was wondering if we we're we're still staying within that metric of of staying right up to the top. We're still within our band of fiveyear average. Okay. Thank you. So to me it's affordability based upon I mean you know we can't run anything to failure. This is not an option but it's all the affordability because we I mean I just real quickly I mean we've got what $100 million of unadvertised cost of licensing on Wberg and Walterville that we're going to pay for them with no revenue. We've got $250 million of decommissioning for Leeberg. If Walterville goes dark on us another quarter of a million a billion 250 million to decommission that. We have so many pressures that we haven't experienced yet on rates that and this

2:49:39 like she said tonight, this is a commodity. She doesn't have a choice. It's just it's really heartbreaking to think about where we could go with this if this thing goes off the rails. So affordability is really important to me. Um and uh and measuring that balance with reliability. I that's your dial. I mean but but to me it's affordability because like I say, people don't have a choice. And so to me, affordability is the most important thing. Staying with And if you want clarification, ask a clarifying question. Go ahead. Yeah, I would I if you have an an idea in your head as what affordability is like a a rate. Well, not to increase above X. Well, don't Yeah. We used to have a policy. I mean, when I first got on the board, stock

2:50:25 would come to us and say, "This is how much money we need." And we'd raise rates to reflect that. Then we turned around, I call it the Matal era, and we turned around said, "No, you're going to stay withinflation and then live with it." And that's the that's the policy that basically the board the direction the board gave in a in a general sense. And I think we're deviating from that now because there's so much upward pressure on rates. And it's not anybody's fault, but it's just happening. And and to me, I'd like to go back to to that affordability thing because I think it we try and stay within 3% of the AGI, but I think we have a a skewed AGI in our community because a whole large student population. And I think it's it's you know, like like they said in our little twoon-1s, it's 5% of the people qualify for for assistance, but

2:51:11 they're more like 20% of the people really qualify. They just don't get it. And so the affordability factor is huge in this community. And it's only going to get worse. It's going to get exacerbated. So you I think if we stay within that 3 to three and a half%, isn't that our target of the AGI? Oh, our affordability metric. Yes. Yeah. And and and so if we can stay within that and and uh and use good comparators, I'm okay with that. And then see what that does to the budget. That's why question. So, can I just clarify? So, so you're

2:51:58 looking to benchmark it to the utility burden number. Yeah. Right. Thank you, chair. Um on page 30 can you for my own edification general economic assumptions capital escalation can you describe the can can you share the rationale of why it goes 5% 4% and then 3%. We show it at the bottom left. Five, five for 26, five for 27, then four, then four, then three. And the market indicators that we look at um show it returning over time to that 3%

2:52:43 number and that is what the Federal Reserve manages to to control inflation. So, we're acknowledging that we may see and actually 5% is a little higher than uh than some of the figures that we're seeing, but to Commissioner Brown's point, we also hear a lot about tariffs. So, so the rationale is that we're guarding against short-term inflation and then returning to a more normal uh target. I appreciate that. Yeah, I uh um thank you. It was uh helpful to to hear that. Um yeah, I uh

2:53:29 [Music] I'm I want to echo the the the need for affordability and I think that that's I know that we are balancing every single plate possible. Um I have something of a concern of of correct me if I'm wrong but I believe that um for supply chain issues that since COVID that it it has pretty steadily been increasing on supply chain issues that there hasn't been there hasn't seemed to have been a a plateau or a uh it going down. Um, so I I do have a somewhat concern about pushing off projects that have supply chain issues right now.

2:54:14 Um, but it's a very light concern. Uh, yeah, I I affordability I think is always top of mind for me and that is something that I want to recognize. I also want to recognize I mean this is a challenge that I think our whole city is facing. I mean, our the majority of our homes and projects and everything was built in the 1940s, 1950s. We're reaching end of life for everything. This is not an exclusive e webb issue. This is not a this is a challenge I think we're all facing. Um, and I uh would be remiss. I forgot a point. Thank you for the great presentation. This is very good information, challenging information, but um it is we are I I know that we're spinning 1,500 plates at

2:54:59 the same exact time and trying to keep things as affordable as possible and it's it's it's a challenging position to be in. So yeah, thank you. Um, so I guess let's see third. So go to slide 31 for me for a second. I just got a couple questions on that. So on the bottom where it said we increased our water investment rate from 3.5 to 4.5. Is that percent was that a rate increase or was that going to we wanted to be at two point so historically you want two

2:55:44 two and a half% of your depreciation going to capital right two and a half times the depreciation was historically where we sat yeah and that's industry standard that's if you can benchmark so are we at three and a half to four and a half on the water side yes we're spending three and a to four and a half% of our capital and and the and I and I go ahead sorry that was the jump that right and in 2026 it's five times okay five times of our depreciated value our annual depreciation

2:56:29 right the question I have is when we gave you direction to do that was that anticip ipation of second second source. Second source was in the conversation. I I probably should have attached the 2021 board materials. I think we attached them last year. Uh it was a and I kind of recall it. I'm just the question that I have is you know now you get back to the to the the questions that you're asking us and is it reliability is it affordability is it a combination of the both certain levers we can turn and it it may change our rates

2:57:17 fractionally and there's ones that we would like to turn like Commissioner Brown talked about uh some of our licensing ones that we really would love to turn, but we really can't because we're we're locked into those ones. The only one that I see that is a is a big lever to turn is Second Source as far as if you want to go from reliability to affordability. And up until last month, I was hearing the $und00 million price tag. And that's where I was buying in on. And then last month I somebody threw around $160 million. And

2:58:04 that gave me pause because going from $70 million to $160 million that is a dial that would absolutely lean into affordability in my view whether it's and the question that I have is do we even have the capacity to fund $160 million outside of rates if we wanted to if we wanted to do it with debt service and level that out like you guys alluded to, how much leveling can we do and how much is going to have to be put onto rates? Um, so to me that's the conversation that I that I need to have as far as implementing this

2:58:52 because I don't know if it's going back and talking to our partners in Springfield again and seeing if there's a way to partner up again because I'm sure that they're seeing the same pressures on what they're doing. Um, but I I don't know. I don't know. $160 million. And then the second lever is is Roosevelt expansion. You know, we we've I've heard little bit of things that okay, we're going to gravel it out and it's like, okay, good. But then then I hear it's a 10 or$20 million project and and I haven't seen that. And hopefully that will be lined out in the CIP as to what the full effect of Roosevelt expansion

2:59:37 is because as of right now I haven't seen those numbers. I've seen I've seen consent calendar things for grading and this and that and three and $5 million, but I haven't seen that total cost for next door. And so those are those are things that I need to see to be able to give you my input as to what is reliability, what is rate, and what can we live with and live without. And as much as I want Second Source and I believe in Second Source and I've been selling Second Source, I've been driving to Salem and selling Second Sources to our legislators. I've been doing all this work for three years on second source and now to realize that second source might be something that would really impact our customers is giving me

3:00:23 pause. So that's that's I need more information on that. We'll go second round. I mean to that same thing I started thinking about Leeberg and you know that is a much bigger cost. That's almost 250 million. Now, I know we have dam safety issues, but if we're not putting any water in the canal, and we also have no fur people potentially to respond to any of our our work there, I'm just wondering how much of that work really even can do if some of that could be pushed off because it's not like our community relies on it if it comes through. The people up there don't really want it to happen any, you know, sooner than it has to. Um, for me, I'd

3:01:09 love to see that one be pushed if it's possible. Now, I know we have some that are regulatory really required to do X before that date. So, I'd love to hear some thoughts on delaying Leeberg. If we're going to have a second source discussion, could we wrap in the the feasibility of the north wellfield um that we have? You know, I don't know if everybody's aware of that that we we have a series of wells that have already been drilled and c and capped encased in the north Eugene area. Although when we implemented them, they drew down one of our another utilities water supply. But in the event of an emergency, I think it's going to be, you know, we just got to get water out of the system. It doesn't matter whose system it comes

3:01:54 from. And so if it's a reliable resource and it's a fallback, I just like to have that conversation, too. If we're going to bring up second source, I'd like to bring that up, too. I'm sorry, Sonia, I cut you off. Well, I just wanted to have staff respond. I I think Lisa is here. I don't know if if someone could respond on this the second or on the Leeberg dam and any, you know, flexibility we might have there to stretch that further. Hi there. Good evening. Yes, I'll chime in here. It's a really good question, Commissioner Carlson. Uh it's obviously more complicated um than any of us would probably like. We do have some dam safety concerns even during this time where we have decided

3:02:39 to decommission but have not yet implemented that. We have some near-term risk reduction measures that we do need to implement in the the next uh you know 5 to seven years. That said, there is a bit of a clock ticking for us for uh starting action on the actual decommissioning and that's related primarily to uh really FK's desire for us to take action. They have not mandated a time frame for us but we have a lot of indications that we need to move uh more quickly rather than slowly in actually implementing uh decommissioning. The work that we have planned for the next handful of years includes implementing those near-term risk reduction measures.

3:03:25 Those frankly are not something that we can delay because they are um uh intended to address near-term potential public safety risks. Uh but our planning towards decommissioning since it's such a long-term process is not something that I would recommend we postpone because at this point we're already looking out about 8 to 10 years before we have shovels in the ground to start the the decommissioning work because the the process to get to that approval to start that decommissioning is so lengthy. Um, you know, we can look at ways to potentially cut costs, uh, but I I don't think that we have a lot of flexibility in delaying long term.

3:04:15 Okay. Thank you. I mean, I I would look to staff if there are any other projects that we think are not regulatory required um and or, you know, based on safety required to do right now. And maybe that's, you know, second source, maybe it's something else. I just love some additional thoughts if we want to hit our affordability goals, which I would love to. Um, you know, I the first five, six years I was on the board, we didn't vote for any rate increases, and I would love to be in that place. I also recognize that because we didn't do any rate increases during that time, the rate increases that we're now seeing are much larger. And so, you know, people don't appreciate that either. So I don't want to be in that situation either. Um

3:05:00 but yeah, any feedback that staff could give on some what do we have in terms of wiggle room. Um I would appreciate it. So over the next month, uh we will be working on identifying potential areas and and the trade-offs associated with that so that we could have a conversation about trade-offs and associated risks of any anything that we cut out of the capital plan. And I'm just going to weigh in. You know, I I know that rates are are important and and something that we need to take

3:05:48 seriously, but also addressing our capital needs is to me as important. You know, I would not like to see us go below 2.5% over the 10 years. Um I've seen other entities do that and it comes back to bite them. you know, you say, "Oh, we'll we'll go to 2% and the age of infrastructure then then that age thing keeps going up and then it costs more to to do it going forward." Um to me that two and a half percent is that is the bottom line for me you know and if if we can figure out how to get some of the major projects done and

3:06:33 have rate and have rate increases that are tolerable. I I think that our I hate to say this, you know, but I think that our rates are generally uh affordable uh in comparison to other communities. There's some communities that are that are less obviously and our annual our wages are lower than other communities. So that that makes it tougher, but we're still not at the 6%, you know, of what uh uh the household burden line is at. Um so ju I'm not opposed to having no saying no,

3:07:20 we don't want to increase rates at all. We want to just cut cut. I think that we have to we have to replace our infrastructure as far as buying transformers and those types of things. I'm for leaning forward into that rather than leaning back, you know, having them buying them now for use in two to three years if there's the opportunity to do that. Um because they're just going to be more expensive in two to three years and we know we're going to need them. So, um I'm not opposed to raising rates to make sure that our infrastructure and our capital is is maintained to the effect that it needs to be maintained. Other comments or questions? Staff, do you have a general

3:08:07 idea of or do you have other questions that you'd like to ask us? Clarifying questions. What I understood is that affordability is a priority. um but also concern over our aging infrastructure and that where we have trade-offs. You'd like to understand what those tradeoffs and those associated risks are and we'll be working on that um between now and when we're back here in July. Did you have anything to add Karen? No, I I'll end on a high note though that your question about Burlesen. We've already decided that's an easy one to put off because we're finishing phase two this year. That was phased out to, you know, potential of six phases depending on

3:08:53 needs. We'll put it into good use. We'll make use of it and find out, you know, what is necessary for the future, but we can save that and take that out of next year's capital plan. And there's a there's a bright spot for you. One other question and and this kind of just just goes to kind of what Commissioner Brown was bringing up in the consent calendar and and something that other jurisdictions are are looking to is do we have surplus properties that could be sold off? I mean capital is one time, you know, onetime monies for onetime expenses. you know, if we've got if we're sitting on properties that we don't feel we're going to be needing or utilizing in the future, is that an area

3:09:40 that we could look into? Um, you know, if we if if if we can sell off a piece of property and go to phase three or phase four on Burlesen, that may, you know, that wouldn't necessarily impact rates as as as it would if if there's because I don't know what all we own. every time I I I drive around it's like, "Oh yeah, we own this and oh yeah, there's that." And so that that would be something that would be uh a question that could be asked as well. All right, thank you very much for the presentations. We will move on to our next item which is board wrapup. And and one of the things that was uh brought up

3:10:25 is in board wrap-up is staff would like to have a little bit of a conversation about uh the upriver meeting. Uh your your uh impressions, your takeaways, anything you would like to share about how the up river meeting went. So with that, we'll just go around the room. We'll start with Tim and any other comments that you have in board wrap up. Um, I have no comments for board wrap-up. Um, other than a a thank you for a tough conversation, I think, or a few tough conversations. It's a hard place to be in, and so I appreciate the the willingness to jump into that. Um, I, uh, upriver uh, meeting, I had the wonderful opportunity to sit at the table with Lisa, um, who

3:11:11 did a fabulous job, uh, making sure everyone was heard and also kind of working through the the discussion items. Also, uh we uh sort of went completely off track as well uh with uh with that with Lisa at the table. Uh so I think we didn't hit every discussion item, but we got into really great conversations about the need, the challenges that EW faces. Um I I walked away from it with a really positive uh aspect to it. I think that that uh many of the community members just felt heard um and appreciated that. And I know that I'm I'm new to this commission, so I was not there for some of the more challenging past year conversations that

3:11:57 were there, but this this was a I think a a great chance to to have everyone's frustrations and concerns and opinions heard and have that as a part of our our culture. um and to be able to to really connect with with our upriver our up river customers. So um yeah, I I walked away from it with a a really positive outlook on it. I think um uh every uh person that I had a chance to chat with there had a a an appreciation to e webb in some form or fashion. Um and I think that it's a it's a great idea and also a great dinner. Thanks, Sonia.

3:12:43 I appreciated all the work that um staff put into it. Um it was, you know, a new format. I didn't get to participate last year. I was out of town during that one. So, I know this is our second year had it. We also went and didn't answer any of the questions because we followed what the people that you know came there we that what they wanted to talk about. And so, um, I appreciated that there were report outs from each group. Uh, I would recommend in the future if we go up there and do this again that we have the tables. Um, maybe we have some topics that we just that we throw out there, but it doesn't need to be as I think structured. People just came there to talk and get questions answered and get feedback. And um, and I liked the report out from the table of kind of the general topics that were discussed. I

3:13:28 thought that was valuable. I will reiterate again that I think it's a huge amount of staff time that goes into preparing for that and um expense for a very small portion of our customer base. But I know that we have a lot of challenging issues up there. So continuing to have good rapport with the folks up there um can be valuable. That's what I'll say. Thank you. Uh yeah, I'm um attended a lot of them and some of them are good and some of them are challenging, but um I think this format is best if we're going to continue to do it. Um I happen to sit with the general manager and the board president of Lane Electric and the conversation always goes to, you know, why is this Lane Electric's territory

3:14:13 and why is it ours? because you know 50% of our service territory is comprised of 2,300 customers or whatever and that's up river and it makes only sense to have Wayne Electric own that asset and hopefully we can have that dialogue with Lane Electric sooner than later now that they have a new general manager and maybe a different perspective on that. Um I you know whether or not we do another one or not I don't know. I it's good to let the people think they're being heard because they don't think they have a voice and they have a voice. I I was the uh the the Mindy my first term was the area of of all of them and and that was when they just they thought it was fun to beat up on everybody. I got up absolutely pound it for three years. It was terrible. But uh I'm I

3:14:58 think it's still worthwhile if if staff thinks it's worthwhile. Uh but I you know I came out with uh it was I didn't come out with any new perspectives that they the communication was the big thing about we could could we communicate better but when they when they said they wanted us to to find areas of relief for storms and stuff. I don't think that's in our mission statement to provide facilities for storm relief. You know when it gets hot where they can go to cooling stations and when it gets cold when they can go get warm and things and so that to me it's getting a little off track. So I hopefully like uh Sonia said we can let them talk but we got to make sure we don't give them expectations we we can't meet. So other than that I

3:15:43 think it's still worthwhile. Thanks. Um yeah I mean I think the last two years have been more productive I guess. Um, I don't know if an every other every year is is necessary. Like I said, I think there's a lot of there's a lot of preparation and work for a little bit of community goodwill. Um, I don't know if there's other ways that we could we could interact up there better. I mean it it's 3% of our customer base and and and it's a fair amount of energy. We

3:16:28 don't do special meetings for other potential parts of our customer base. I mean for me when I was reading through the uh the audits and a bunch of the financial things here um 90% of our 90% of our uh customers are residential but 50% of our revenue is commercial. You know we don't do a special meeting for our commercial people. you know, uh 50% of our water is commercial and 90% so I mean uh to go spend that amount of energy on that amount of thing

3:17:13 is it feels good but I don't know if it's the the best thing to do for with our resources especially um the table that I was at you know we were a we were a river driven table. Um, and so that lays well with where I I land on source protection and those types of things. So, it was it was good to be able to share some of the things that we're doing up there with some of the people, but I don't know. Um I think that we should definitely have a conversation at some point in the future before we start planning next year's whether it's needs to happen on an annual basis maybe semianually

3:17:58 um might be a way to go with it and then figure out some other sort of outreach to do on the off years whether it's just a picnic at Lloyd at you know at the at the park up there or something like that that might more community based and less formal might be a way to go with it. So that would be something that I would like to have a discussion at further than that. Um as far as other wrapups, um I don't have anything else to say. There is one thing though that Deborah did want to give some acknowledgements about all of the hard work that staff did put forth on the river meeting. Thank you. And I did want to let you

3:18:43 know too that we do take care of our general we do take care of our major customers. We do a lunchon every year. Yeah, it's not quite the upriver production but not entirely forgotten. But I did want to take a moment to thank staff. A tremendous amount of work did go into that to your point, Commissioner Carlson, and it really takes a village to pull something off. Um because we all want to go home tonight. I'm not going to name everyone. um about 40 names here and it was commissioners, business continuity, communications and marketing, customer service, electric operations, energy, finance, generation, the GM office, uh security, vegetation

3:19:29 management, water operations. Those were the folks who hosted the tables, hosted the open house tables, um provided the security and did all the premeating planning and preparation, uh as well as the event setup and tear down. And I just really wanted to appreciate their work on that. Excellent. All right, with that said, uh future board agendas, anything you want, anybody want to talk about? I just pointed out that we're already over time for July and so and we're an hour short on August and so when you guys do your agenda planning just suggesting if you want to maybe smooth it out a little bit we we got an hour available in August and we're overtime in July. So just to

3:20:16 kind of keep the pressure you may want to think about that if there's something you can move around that's not time sensitive. All right, I will uh bring that up with when we do our agenda planning. See if there's anything we can do. Anything else for the good of the order that we're adjourned.