EWEB Board of Commissioners — July 7, 2026

0:04 facility uh and safety awareness and meeting logistics briefing. Um thank you for attending tonight's board meeting. P web management subject matter experts are present in the room and virtually. Meeting is being streamed live and recorded. Please speak loudly and clearly so everyone can hear you. Public testimony is welcome. Signup forms are available in visitor access is limited to the board meeting room and restrooms. Restrooms are located on the first floor exit through the righth hand door at the front of the room across the hallway. In the event of an emergency such as a fire or security incident, follow all instructions given by staff and evacuation required. Please call me proceed to the nearest safety exit as identified and directed by staff and evacuate away from the building to the farthest points of the parking lots allow clear and immediate access for first responders. That aside, then the first agenda item is the agenda check. Is there anybody

0:49 that has any quick corrections or want to modify the agenda? If not, then items from board members and general manager. I will start with Mindy. >> Tim, >> uh, two things. Uh, first, we saw in the news the University of Oregon is moving towards an electric boiler. Uh, they're saving $15 million for that. And so, I'm just heartened to see that. I know that I had brought that up at a previous board meeting and that was a concern of mine with their older system. So, I'm glad to see that movement there. Um, the second thing that I wanted to mention was, uh, seeing the e webb uh, booth at Pride this year was really great. I saw staff engaging with a lot of folks that were wandering around and I know that that's probably not going to make it to this board level of of that kind of engagement, but uh I just truly want to shout out the staff that were there. It

1:34 was it looked like they were having a great time. So, thanks. >> Thank you, Sonia. >> Nothing for me, >> John. >> Um, thank you. I just want to give a shout out to a staff member. I had a constituent that came to me at a at a Fourth of July picnic and wanted to sing the praises of Amber Dry. She's in the distribution and engineering department. They had an issue where they had a pole that needed to be realigned and they were going to put the pole like right in front of her house or something to that extent. Amber came out and looked at it and figured out a fix that was amanable both to the utility and to them. And so she was just really happy with the the way that our staff uh looked at problems

2:19 and didn't just say this is the one way we're going to fix it. that there's always other perspectives to look at and I really appreciate uh that in all of our staff. You know, being willing to uh look at things from different people's views and and try and make the best of of what is sometimes a difficult situation. So, I just want to send a shout out to Amber and all the people in distribution engineering. Thank you. >> Thank you. Um I'll go I've got several items. Number one, I noticed that our our closest neighborhood, Hayden, was fined by DEEQ for storm water violation. And although I don't think it was a pollution issue, I just would wondered if you could give me just an email feedback to make sure that because I know we share a system with them and they discharge right into the river

3:05 right above our intake, I believe. And so, and it's an industrial, it's a a meal, and they were fined. They they did something wrong or they wouldn't have paid the fine. So, you could follow up on that. I just have enough information for the media. Um, and then I was surprised to see that they did live fireworks up to Tokati. I know that we're, you know, that's right up at Mackenzie Bridge, right in the middle of the forest and they did live fireworks up there on the holiday. And so that was surprising because knowing all the efforts we go to for fire prevention. Then lastly, I really could give a shout out to stop. We had an underground transformer blow up in my neighborhood again. But anyhow, they they came out, they made safe, they had a guy there for 24 hours where they had the wire out, the crews got everything done. It was all on the weekend. And a shout out to the electric crew that that did it because they I mean the flagging the

3:50 everything the pavement repair everything was 100%. It was really uh good to know that that that's that's our crew. So thank you very much John. >> All right. Thank you President Brown. Um yeah a couple items from my end. First of all, want to note that we're using using a new platform tonight. Um, Teams Town Hall to host these public meetings and tonight is its debut. Um, users may notice a few subtle differences um through overall functionality. Um, so should feel familiar, but um if there's any issues um definitely share some feedback on the experience. um please contact the GM office if you have any issues or even just positive feedback

4:36 for the new system, but just wanted to alert folks of the use of the new system um if it was a surprise to you. Um couple other items I think um we provided a list of the engagements that I had um during this month and of note um I was able to meet with assistant city manager Matt Rodriguez um the city manager Jenny Hiroyama and then also with the um Eugene Mayor Kudson. So those were important meetings from my end just to introduce myself um to city leadership and to make sure that uh we were beginning to I think um sew the seeds of a better relationship moving forward. Uh the mayor did mention that she's putting together um kind of a

5:21 concept around a team Eugene and I told her I would be certainly um you know excited about participating in that. So just wanted to share that with you. Um couple other items of note. Um while um you know I was in Boston um last week um at the APA conference I ran into some folks from Fitch rating uh which were very complimentary of what we're doing here financially. I wanted to share that. U in addition to the fact that we um did issue some bonds. uh we had uh both utilities completed capital project borrowing in June. Market showed strong interest in e webb uh name and investor orders roughly three times uh

6:08 the amount of supply. So u the electric utility borrowed 113 million at a true interest rate of 4.4%. And the water utility borrowed 61 million at a true interest cost of 4.3%. So um you know really market conditions were favorable for refunding opportunities. We were able to take advantage of that. Um prior to um um refunding um debt provided um the refunding of the debt provided 2.8 million in net present value savings to the electric utility and over $700,000 of um net present value savings to the water utility. So just wanted to share that. Um, you know, just another item with note is that if you'll see what's

6:53 happening, we're in pretty dry conditions. So, drought conditions are are moving pretty rapidly. Um, if you look at the McKenzie, the base flows are naturally drought resistant due to volcanic geology that stores water for up to seven years. But that said, as of June 18th, both intakes at Hayden Bridge remain operational. However, flows are within one inch of um levels recorded at the peak of the 2015 drought. Um because we have two intakes, um intake one is more shallow, but intake two um is a lot deeper and um we will retain operational flexibility if flows continue to decline. So, just wanted to share that with the um board that we are beginning to see some um you know um concerns

7:41 around drought and that will gain some media attention but I feel like we're in pretty good position um to withstand it. The only other thing will be there might be some curtailment. Um we may be subject to those curtailments um but they put municipal water supply um at the top of the priority list. So uh while there may be some contrament we um are hoping to see it at a minimal. Um and then the last thing is that city of Eugene um increased their wastewater and storm water user fees. Uh wastewater is about 5 a.5% uh storm water 5%. Um that did we mention that because you know that's on the e-w bill but eb rates are remaining the same for the rest of the year. So that's it from my end. Thanks.

8:28 I did forget one thing if I may. Um I noticed that you may have seen that MWMC Metro wastewater management is talking about serving Junction City and Creswell. And in my opinion, if they do that or if they go to that exploratory thing and they run lines right away from those communities into River Avenue to our facility, whether or not we as a water a regional water provider want to consider that because those communities are have challenges with water supplies too. it. So just planting that seed, nothing to go to put it on the agenda. But I'm just thinking if if that's an idea, a thought that the majority of the commissioners wanted to explore, then it's coming up. It'll be it'll be years out, but it'll still it'll be an opportunity because once they do that, um just the scale of economies and so just planting that seed because they're

9:13 studying it now. So that's it. Anybody have else have anything? >> If not, then the next agenda item is public input. Before I gather it in, I'll give the preamble. Uh welcome to the public input session for this meeting. EGB is a public nonfor-profit organization whose charter is to deliver drinking water and electricity to our community. Although this form is not used for an open back and forth dialogue, commissioners and staff value hearing diverse perspectives and receiving community input. Speakers are asked to keep their testimony relevant to e web business and request that everyone share their comments in a productive and respectful manner. Should speakers or audience members become disruptive, they may be muted and or removed from the meeting. Um at this time, I have one caller and one in person signed up. And when I call your name, you'll have three minutes to provide your input. The public is now

9:58 open. The first is um online. Thank you. Uh is um uh Phil Penn. Bill, are you there? >> can you check to see if you >> Mr. Fington? Um, as a reminder, you'll need to press star six to unmute. >> Okay, >> I can see you're unmuted now. >> Much commissioners, >> are you are you there, Phil? >> Thank you, commissioners. >> Yes. Can you hear me? >> Yeah. Okay, we'll start the clock. Thank

10:43 you. >> Additional two. >> Okay. Thank you very much for allowing my testimony briefly. Um, I wanted to share about 30 years ago when I first came to Eugene Springfield, I was a water resources planner previously in Texas in San Antonio. At the time, uh, the city of San Antonio was the largest city in the country relying upon a single water source, uh, very large and productive aquifer system. But um I used to have on my desk at uh at the uh regional groundwater protection district I worked at a quote from Benjamin Franklin that said, "Men know not water's worth until the well runs dry." We are so blessed to to have such a productive um surface water resource in

11:29 the uh McKenzie and Wamtt systems and I would just strongly encourage you to accept the recommendations uh of your staff for the Wamut treatment plant. Um perfecting the water right that you have on the Wamut River and having a secondary source uh for water treatment uh beyond the Hayden Bridge uh reservoir plant. Um I think it was on uh page 19 of your packet, the benefit cost uh comparison in table three that I thought was most telling. None of the of the options are without significant cost, including just retaining the existing plant and remaining a single source. I know you will hear if you uh

12:14 do adopt the recommendation and move forward with uh perfection of that water right and creation of a second source um that you'll get a lot of complaints from people about the cost. About 10 years ago, I worked as a as a planner with the city of Springfield, and the cost would have been considerably less than it currently is, but unfortunately in that 10 years it took to really develop this uh package that's before you, very well thought out by staff and I think covers all the uh the basins and applicable requirements. Um don't be put off by this cost. It's considerable, but still the cost of doing nothing or the risk of losing that

13:01 primary source that we have for water treatment is an untenable cost and an untenable risk. So, I really encourage you to uh accept the recommendation that's been presented as alternative three and um you know, I wish you the best of luck and thank you for your service to the community. >> Thank you, Phil. Next, we'll go to inerson speakers. The first is Jim New followed by John Hackinson. >> Good evening, commissioners. My name is Jim New Ward 7 and I'm a volunteer with 350 Eugene. After the commissioners and general man manager Haristston's

13:46 accolades about the Smith Reservoir opening at the last meeting in July, we had to check out the Carmen Smith Reservoir Recreation Area this last week. We kayak the Smith River Reservoir to the end of the lake campgrounds and enjoyed a lunch at the campground. The contractor did a magnificent job of craftsmanship on signage, picnic tables and foot bridges and a very compostable restroom made of sustainable products. It was a magnificent day on the lake with osprey feeding on bull trout and the lake to ourselves practically. It is quite a treasure to have these facilities available to us within an hour and a half drive of Eugene. Members of 350 recognized EWB's commitment to providing a healthy sustainable ecosystem. Thank you for these opportunities and all the staff's work and planning that went into this project. We look forward to meeting with

14:32 general manager Harrison Z. On another note, as you consider the Wamtt River water intake tonight, consider this afternoon in a 3 to1 vote, Lane County Commissioners made a motion to absolve a home homeowner near Walterville who built several buildings totaling over 5,000 square feet without any county permits and within 100 ft of the Mackenzie River High Watermark. This sends several disturbing messages to residents who plan to build along our drinking water sources for Eugene. This despite testimony from regional habitat biologists with Oregon Department of Fish and Wildlife that the buildings were built within the Mackenzie River waterway and backwater channels. Thank you for your time. >> Thank you John Hackinson's by uh

15:18 followed by Janet ears. [clears throat] >> Good evening commissioners, general manager staff. I'm John Hawinson. and I live at 2595 Lincoln adjacent to your College Hill Reservoir project where I had the pleasure of meeting Laura Farthing, Clare Ray, Karen Kelly, and even John Harrison and many others uh who I've been uniformly impressed with throughout. uh as a result of meeting those folks um and uh meeting Mike Sullivan, a former City of Eugene executive, I put two and two together and figured um we might be able to do some good in terms of advocating for the WAMIT treatment plan. So, we coordinated with Eb. Uh they

16:03 guided us all the way through and we talked to several uh influencers in town, including Commissioner Brown who spent time with us. Um I won't go into detail on that. Um, I know you've got an array of data and analyses in front of you about this water treatment plant, so it's difficult to add anything new. However, I've got um couple of personal notes that I'll share. In January 2024, I happened to be in Springfield one night. I got out of my car and within about 50 to 60 meters of me, a transformer blew up. This was at the height of the ice storm. 20 seconds later, another transformer blew up behind me. 20 seconds after that, another transformer blew up. So, welcome to Springfield. Uh, what I didn't

16:49 realize at the time was that they their water utility and electric utility sub was back on its heels and was going to issue a boil water alert because they got uh nailed in the power uh to the uh water plant. Um, so I was getting educated on the Wamut treatment plant. I called sub and asked them about this and one of the people on their communication staff confirmed that 20,000 out of 32,000 households or clients got a boil water alert. It could have been far worse. Uh not only that, but Springfield got hit, as I'm sure a lot of you know, a lot harder than Eugene did. Although there are people in this room who I'm pretty sure lost power and maybe lost water during that ice storm. So I bring

17:36 that up because it's potent. It's recent and it's not hypothetical. We don't have to speculate about it. It actually happened. And so Ew Webb dodged a bullet. Springfield took a wound. Um my position is just as the first caller said, the cost of doing nothing um are going to get u going to be a pence compared to uh you know cost of doing nothing exceed the cost of doing uh taking action tonight. and uh not letting costs get in your way of doing the right thing. So, I appreciate your time and all your service. Uh thank you very much. >> Thank you very much. Um next is janitors.

18:29 >> Thank you for the opportunity to speak with the board tonight. I have four topics I'll touch on briefly. Uh, one I tried several times to get a meet and greet with the new general manager straight from the bowels of BPA, Bonavville Power I think, or one of those big corporate entities. I'd like to get a fundamental understanding, a flowchart if you will, of how power gets from the ground to the consumer and at each stage, who's paying for what. I would like to get a little an education how that flowchart occurs. I think all consumers should know this. Second thing I want to bring up aside uh

19:15 from several times trying to meet with the new general manager and I'm quite serious about that. I like to meet with him in his office. Second point uh storm water you're billing now for the city of Eugene. I made several visits this past week and got quite um different views on why the storm water piece of our e webb bill does not go provide a narrative a brief one. I'm sure it can figure out a way to do that. So e webb tells me it's the city that does not want to provide that narrative to the consumers, the rateayers. And the city tells me it

20:01 is e webb. So I'm getting chase the tiger around the tree. I'd like to know the truth and I'd like e webb to be com compliant and allowing our e webb bill to include a narrative. Our storm water bill, many of you probably don't know this, since 2023 has gone up 50% 50%. and they purposely keep us from being informed because they like us fat and stupid. I don't like being that way and I'm sure a lot of others don't either. We are intelligent people. We deserve as a public utility both through the city and e webb. We are not just customers. We're actually

20:47 e webb. We are actually e webb. So please correct that. The third one, conservation used to be uh you could contact e webb. There was a several conservation programs anyone could tap into. I actually have acquired my two ducklas heat pumps with a 0% interest loan. Very happy with them. When I called conservation weatherization, I get no calls back. N zero zero. And yet our rates have increased significantly. And thank you. >> Thank you, Janet. Is there anybody else in the audience that would like to

21:32 address the board? If not, then I will close the public hearing and I'll ask for comments from uh commissioners Sonia. >> Well, thank you all for the input tonight. Really appreciate that people are paying attention to these really important topics. I know it's complicated and the packets are long and it's really heartening to see that there are people that are digging into this um just as much as we are. Um so thank you for coming out. I did want to address um uh my constituent uh Janet. I'm sorry I didn't get to call you earlier today. I had to work all day long and then had to run right over here. But um I'll I will look into and and have staff I had contacted staff to reach out and talk to you about some of the other um

22:18 conservation and the other issue that you raised with me. So um anyway, I appreciate everyone coming out and oh and I did want to clarify um BPA is the Bondville Power Administration. That's a uh part of the federal government. Um so that's not a private entity. Anyway, um we'll get working on it. So, thank you, >> Sean. Cindy, Tim, I'd just like to thank everybody for coming out. Um, Phil, thank you for your comments. Uh, Jim, thank you for uh acknowledging what I I I agree. Smith Reservoir is a hidden treasure. I It's It's out. The secret's out now, but that is a really nice place. Um, and John, thank you for the positive comments. It's really good to have somebody come there and tell us what we're doing. I appreciate I really appreciate that. And Janet, thank you

23:03 very much. I I will just comment on storm water because that's not my favorite topic. Um they raised it 18% this year just to backfill. They now 100% of the storm water fees go to parks maintenance. I know five but 18 this year plus five they just did five so 23% this year and they're using that money for parks maintenance and parks operations and then they're back taking that money to general funds. So it's a budget thing that the city did. We don't have anything to do with it and uh and staff will look into your concerns. So with that, um I will um then John, do you have any comments? >> Uh yes, President Brown. Also just wanted to echo the um thanks for the um recognition of what's going on up at um at Carmen and the um the recreational center. And then also thank John for his

23:49 positive remarks on the um on the um second treatment plan. And then also Janet. Um I'd be glad to to spend a few moments talking to you. So, we'll we'll make that happen. >> Right. Thanks a lot. >> Thank you. And I was just testing staff to make sure that they were keeping track of me. I skipped correspondence. I apologize for running over you like that. So, yeah. Now, uh general manager correspondence item. >> All right. Thanks, President Brown. So, just a couple items I wanted to cover. Um first of all, wanted to um touch on the risk management effort. Um, as you're aware, void board policy, um, SD20 requires a periodic report on the status of enterprise risk management activities here at Eb. Um, let me say first that I'm very impressed u with the

24:36 intent for strong governance that the board policy SC20 establishes reflecting I think e webb's u commitment to an enterprisewide approach for risk management. um having strong governance background I think it's very important to establish that and and I think we've been u from what I've seen it's been established really well here at e webb um just a couple of things in terms of the outcomes um the um risk management program uh I think is really strong here because it's crossf functional um you can see that um the erm coordinates the organizational risk management framework by identify and assessing uh risk or existing uh risks um and emerging risk u facilitating the

25:22 development and implementation of risk treatment strategies and monitoring residual risk um and evaluating the effectiveness of mitigation efforts. Um the ongoing process helps ensure that um organizational decisions are made u within the context of our governance structure and our risk informed um as internal risk as well as external risk continue to um I think evolved e webb has u you know adapted u I think our administrative process is to make sure that we're focused in on being able to mitigate risks that are presented to our strategy you know as we try to implement that moving forward. Now in particular that this year um the current enterprise

26:07 risk register included 121 identified risks across the categories of safety, operations, financial workforce, strategic reputation, compliance, environmental and technology. Um the six highest u rated enterprise risk were natural disaster events um electric distribution interruption uh compromise single uh water source um climate driven fire risk workforce disruptions and cyber attacks and service disruption. So I wanted to make sure that one um you know I raised uh attention to the correspondence that we provided and that um this is a very important aspect of the business making

26:53 sure that we're implementing a strong um enterprise risk management process and I think the outcomes um are are going to improve what we do here at e webb. So just wanted to bring some focus to that. Uh there were a couple other items I think. Um we've got the um 2026 power market budget hedging and generation update that we provided which is important in terms of um how we go about planning um and our trading operations. um managing power supply and wholesale market activities consistent with the utilities um financial objectives in accordance to the board strategic direction policy 8. So I think the uh

27:39 kind of the bottom line here is that uh you know our energy positions are well within compliance limits established within SD8 um and within procedures and strategies including EW's 5-year um hedging strategy um overseen by EW's risk management committee. So it's this is actually an extension of our enterprise risk management um approach. So just wanted to share that that's actually risk management um in action. And then the last thing I think that's probably the most pertinent is our record of decision on the BPA provider of choice above contract high watermark load service election. Um you know we

28:25 created a record of decision. Um it's a formal tool to communicate within e webb and among the board um decisions that management may uh make that could have real profound public interest or impact. Uh the decision made that I made was to um elect as you saw in the materials um option C a 50 average megawatt uh fixed flexible followed by long-term um tier 2 as e-web's above contract high high watermark load service election under the BPA provider choice contract. Um this decision was based on staff analysis u management recommendations and within uh with concurrence of the assistant general manager um chief

29:11 financial officer and um chief electric operations officer and chief customer officer. Um in terms of impacts um the U BPA above high watermark um election will not have immediate impact on e-web's costs or energy portfolio as um we are well below our tier one allocation. Um that said the election u carries long-term implications on how e web acquires resources and makes energy decisions including obligations to accept um elected power deliveries from BPA. Now option C u 50 average megawws fixed flexible and the long-term tier 2 allows e webb to leverage u its

29:56 operational flexibility and pursu pursue near term local uh resource options while using the pool long-term tier 2 as a back stop for longer term load growth. Um, this option allows EW Webb to mitigate individual risk associated with larger scale or unforeseen load growth and resource needs. And this option gives e webb flexibility and control and how it meets state and regulatory compliance requirements while recognizing e webb's unique role in the Eugene community. So just wanted to uh share for the record the decision as well as kind of the rationale behind it. So, that concludes my um comments on the correspondence. >> Thank you very much. Any comments before

30:42 we go? John, you had a comment. >> Yeah, actually I've got a couple. Um first, I'll start with the hedging. Um thank you for the the correspondence on on our hedging program. Um this is something that I sat down with staff a few years back to to get a more grip uh get a good handle on it. Um and and I I like the direction we're going. Um, the thing that I think is going to be changing in the next few years is once we get into 2028 and get into that next level BPA contract, the combination of that, Walterville, Leeberg, and Carmen Smith, figuring out where we're at, I think that that program is going to need some some uh real sharp pencils in the room looking

31:28 at that. So, what I would hope is that sometime next year, I'd love to do another work working group for me at least, just to kind of see where we're going with that. Uh, you know, we've been on a track for the last several years of this is how we've been hedging our things, but there's a lot of moving parts that are going to coming forward in the next couple of years. So, and that's a very important part of the reason that we went with the the BPA contract that we went with was keeping some control of our our resources and being able to use those and hedge those. So, I in the future I just would like another tutorial on where we're going with that. And then on the uh above high water mark um the one

32:13 question that I had about that and I and I totally agree that this is the the correct uh path to go down. The question I had was was there different levels of uh commitments. We're committing we're we're buying into the 50 megawws. Were there different levels? Could you have done 30 megawatts? Could you have done 50? Could you have done 90? And and how did I mean I I saw the the levelized charts that we're not going to hit probably 50 megawws until 2048. Could we have would it have been a a more reasonable one to have a lower one? I I just it in the memo it was never really stated as to how we landed on the 50 as

32:58 as our our benchmark moving forward. Yeah, the U 50 was based on what we had seen in terms of forecast potential forecasts and knowing that they could move around. Um, you know, we do have a lot of headroom under that 50. Uh, but also we have the ability to back out of it, >> right? >> So, I think, you know, it was just really making sure that we were hedging towards what we thought we would, you know, need fully opposed to maybe shorting ourselves, so to speak. Okay, great. Yeah, and that was that was just a question. I I figured you guys kind of looked at it and said 50 is kind of the right number. Um, we do have an like I said, there is an option to to, you know, to opt out at one point once we

33:44 again get into our Bonavville contract and figure out where we're at, how we're how we're moving forward and how markets shift. So, um, I appreciate the work on those and I appreciate those correspondence. So, thank you. >> Anybody else have anything before we move to calendarers? If not, um, next agenda item is consent calendar A. Um, anybody like to make a motion to adopt or is there anybody want to pull anything? >> Calendar A. >> Is there a second? >> Second. >> Discussion. All those in favor signify by saying I. >> I. >> Consent calendar B. Um, I want to pull six garden. Sorry, but Daniel's thing for me. Um, anybody else want to pull anything?

34:31 Not I'd entertain a motion to adopt Bob items number six item number six. >> Is there discussion? All those in favor signify by saying I. >> I. >> All right. Number six, the janitorial. Um I I appreciate your response saying that we had 98,000 ft here and that's the entire facility including truck repair and everything. And I'm not so sure we cleaned the truck repair floors and all that. But I my math I used 98,000 ft here and 14 in Dayton to like 112 plus or minus and took our 460,000 a year. That's like 34 cents a square foot. Um the largest class A office building Eugene pays 10 cents a foot. We have property management company where we average 15 cents a foot. So the fact that we have to do this and you know I I

35:18 look at 4J and I look at UFO and I look at the city of Eugene they don't and we this preferred provider thing about they tell us what it's going to cost and we have to pay it and uh sorry to get in the weeds but is there any way that we can address this because we're talking 15,000 a month for five years. Is there any way out of this? Yeah. Well, I would, you know, I hear what you're saying, but at the end of the day, this is statutory. >> I realize the provider, but yeah, the fact that they just tell us what it's going to cost and then somebody at the state blesses it and I I know if I'm in the private sector, the largest class A office building in Eugene pays 10 cents.

36:03 >> Yeah. Well, we uh you know what I can do is commit to exploring the process of which they go through and actually qualify for the bid. Um but like I said, you know, from what we've reviewed, it's really a statutory driven um outcome. And so there's not a lot of flexibility. We did look at whether it was cost-effective for us to do it inhouse opposed to go through this process. Um and I think we can provide that if we haven't already provided those um those numbers and think in the u in the memo, but it didn't pizzle out. It was much more cost effective to go with that current contract. Uh but that doesn't compare to some of the things that you're suggesting in terms of cheaper square um dollars per square foot.

36:48 >> If I can get same service for a third of the cost and do it and hire local people, that's a preference for me, but I know that the state of Oregon has this mandate about how we these things go. John, you had a question. >> Yeah. Um this came up last year. It was a consent calendar item and we we pushed it off and we made it a $500,000 for one year. We gave him a one-year contract and asked for a report to see how much it would be to do it inside in-house. And I didn't I don't I didn't see that report. Um, I would have liked to have seen that report and costbenefit analysis uh before I had approved a 5year $2.3 million contract to clean

37:34 these buildings. Um, you know, I I know in-house as opposed to um hiring these people. I I understand the the way that the state contract and everything works. We can do in-house. In-house would be union jobs. Uh, I would I would assume I'm sure they would be IBEDW as uh union jobs that are coming into our into our high highpaying well union jobs that are coming into into our communities. So, if it's a if it's a six of one half dozen or the other and I also understand the good work that this other this other agency does bringing in uh individuals that that may not be able to get

38:19 employment in other areas. I just would have really have liked to have seen that analysis that was done that says it was more expensive or it was a wash before I was asked to to put this on on the consent calendar. >> Any other discussion or comments? Sonia, >> when does the um so does the current contract expire this month? >> LA last year we were posed with the same question. We've kicked the can down the road. We did a $500,000 interim so we we could do the [clears throat] study and now we're back for 1.8 >> 2.3 million >> well 2.3 cumulative 1.8 on this one to to fill out the next four years correctly.

39:04 >> 2.3 cumulative for five and we already paid $500,000 for one year. So now we're we're at four more years on this contract at $1.8 million. This >> this new new contract five year >> a five year >> just another fiveyear contract. Okay. So well that's where we were. And that's what we did. We we we wait we gave them 500 grand last year because it averages about 460 I think to do the math. Um and so we approved 500 for janitorial services. They were going to come back and tell us whether we could hire in-house or not. And I what I've heard is it's about a wash and so we have this contract now with this third party. >> So that's okay. So again my question so it's expiring this month. Do we have any other options given that it's expiring this month was

39:50 my follow-up question? Okay. What other options could we have? You have an option for uh you could approve a shorter uh a shorter contract. Garten is the uh and we could provide more information about how Garten was uh selected. they are one of the Oregon forward contractors. We could provide more information into the analysis. >> Aren't they the only proposer? >> I I tried to verify that uh right before the meeting and I

40:35 think so. >> Yeah. >> Anyhow, because I just it just it's it's hard for me to accept when they they just tell us what it's going to cost. We have to accept it. That's not competitive. Sorry. Don't sit. >> Um I don't think my personal opinion is that we shouldn't spend a lot of time on this. We vote on a lot of contracts that cost a lot of money and um I appreciate the commitment to keeping costs low because that trickles down to our customers. But I think in the grand scheme of things, maybe we could save a little bit of money if we went with a different company. But there's a lot of ways that

41:20 as a public utility, we give back to the community. And I think supporting this organization that um gives jobs to people with a variety of developmental disabilities is a worthy organization to provide these services for us. And um I just think it's a pretty small issue compared to all the much bigger things that we're talking about. So that's just how I feel. >> Yep. [clears throat] >> Thank you, President. Um, I'm going to agree with Commissioner Slashberg. I think that this is uh we're 2 minutes over on uh our consent calendars. This came up last month. We're hearing different conversations of uh you've heard that it's going to be a wash and then you have not received a memo. And so I'm just confused as to what number

42:07 may exist out there, but I think that ultimately we're making a decision on a good organization that's doing good things and helping people get employment that they otherwise would not. Um, and uh, I do think it [clears throat] there is an unfair comparison from private market to current. That's typically true, I think, in in a lot of our business as well, just the difference between private and public market. So, um, I'm on board with moving forward with this as is and and just moving on. >> Thanks. We're ready to call a question then. Um, somebody want to make a motion. >> Move to approve. >> Is there a second? >> Second. >> Discussion. All those in favor of approving the garden item six on consent calendar B raise your hand and say I >> I >> opposed. I pass it four to one. Thank

42:53 you. Next agenda item is going to be um water So um while while our team gets set up there um one of the things I wanted to mention to the board that um you know kind of per the board's direction u from October 21 um work session our staff have u developed preliminary design alternatives lamid treatment plant uh project and estimated the cost of the

43:39 remaining um single source if we were to remain single source. Um you know tonight I think this is important because this is a you know from the testimony and from what I've gathered coming in to this role this is a huge decision. It's been multi-year u you know if it was a no-brainer it would have been done years ago. Um there's a a lot of things that we have to factor in, but I think the team has done a really good job at sharpening the pencil and um setting up an opportunity for a decision tonight that will allow us to continue the momentum moving forward while um considering some additional potential cost impacts and making sure that we're considering affordability along with resiliency um

44:24 as we kind of make this decision. So, um definitely want to make sure that the board understands that um you know what we're looking for tonight, I think is um direction on a preferred alternative and the contracting method and that subsequent to that um you know we would like to come back with what would be more of a firm kind of cost estimate and what the rate impacts could be and the importance of that is once we get the decision uh you know in terms terms of the preferred alternative then we can bake that into not only a rate analysis but the um but the u water um utility financial plan. So just wanted to share that. >> Thank you. Uh good evening President

45:11 Brown commissioners general manager Haristen and assistant general manager Hart. I'm Karen Kelly. I'm the chief operations officer for the water utility and with me tonight is Laura Farthing. She's our principal engineer in the water utility and also the project manager for the WAMIT treatment plant. We're very excited to be here tonight to share with you the information about our alternatives analysis. And we will get started right away. First, I want to mention that you've seen Laura and I a lot in the front here, but we are really backed up by a team of experts from across our utility and also across the water utility industry. So, it's not just us uh really presenting this information to you. We've had a lot of help and support and we're very grateful for all of it.

45:59 Just to start off, want to remind folks that Eugene's drinking water does face significant risks. We heard some of that tonight in our testimony. Appreciate those folks who came out to testify. These are not hypothetical risks. They are events that have already occurred. Hazardous spills in the Mackenzie River. I think we had three in the last month. wildfire in the watershed, an ice storm that came close to taking Hayden Bridge treatment plant offline, and in each case, the system held, but each event exposed the vulnerability of relying on a single source. The Cascadia subduction zone earthquake does represent a more significant threat, one that is uh scientists and state planners have known for a while here that is a matter of not when or not if, but when. So, we take

46:44 that very seriously. Most large utilities have multiple sources of water just as they have multiple sources of power to hedge for these risks. This redundancy serves two purposes. It allows the utility to take our treatment plant offline for maintenance without disrupting service, and it protects the community from extended emergency outages that can be devastating to public health and our economy. National data scaled to Lane County suggests a one-day outage could incur an economic loss of between 29 and 57 million. In addition, an extended outage could also trigger reactive regulatory mandates that would be far more costly than proactively and planfully addressing the vulnerability.

47:33 Before we look forward, I do want to take a few moments to look back to see how did we get to where we are today. Ew Webb has been contemplating adding a second source for decades, literally six decades. And it is a best practice for water systems of our size. Because of the size and complexity of the project, many boards have wrestled with making an investment of this size. And the rate pressures have been a recurring factor. We're well aware of that. At the same time, this board, and thank you for this, you have made some deliberate strategic investments in water infrastructure resiliency, in particular, transmission upgrades, water storage, and the seven emergency water stations that we have throughout town that's capable of providing 1 to two gallons per person per day of emergency

48:18 non-potable water. These are excellent investments. Again, we are grateful for those, but they were not standalone efforts. They were built in support of prepar in preparation for the next pillar of resiliency which is our water treatment plan. You will recognize this slide from October. Uh we did present this at the work session. It shows all of the alternatives that we found over these last six decades and how if and how they meet the alternatives and the objectives that we need uh in this second source. And through that, the board did confirm that the WAMIT treatment plant does meet all of those objectives. As a result of that, we did receive direction at that October work session,

49:04 and that direction was to reassess the 2017 preliminary design in the context of today's risks. In addition, develop alternatives for three different capacities that would provide different levels of service to our community. Those were 10 million gallons a day, 19.4, and 30 million gallons a day. Next, we were asked to estimate the cost of remaining a single source. And last but not least, to continue advancing the permitting and land use approvals. During tonight's presentation, we will detail our findings in each of these areas. And as a reminder, at the end of the presentation, there will be time for questions and deliberation on the alternatives. We will be looking for your direction on which alternative to

49:49 pursue and if it happens to be a treatment plant on the Wamut River, we will be asking you to authorize the next step in the contracting process. So, as mentioned, second source efforts did belong uh did start a long time ago, and I'm not going to take you back all the way to the beginning, but I do want to go back to 2009 to start. There was $120 million in the capital improvement plan for a new water plant at the EWEB headquarters site. At that time, there were significant rate pressures and so in the early 2010s, the budget was reduced to about 68 million. Next in the timeline, the Oregon Resiliency Plan was released in 2013, raising awareness about the Cascadia subduction zone earthquake and urging

50:35 all utilities to have regional preparedness. Moving forward in time to 2015, the board did approve the master plan and funding for two phases of water treatment plant construction. In 2017, the web completed a preliminary design for a 10 million a gallon a day plant that was specifically engineered to that $68 million price tag. As you'll hear later in the presentation, the plant was conceived as a phase one investment and it was intended to be expanded over time. It was engineered to protect residential life safety in a Cascadia event, but not to restore normal service, although that was not particularly emphasized during that board meeting. So, this was the risk and cost landscape for the 2017 preliminary

51:22 design termed Cascadia readiness on a tight budget. However, despite the reduced budget and plant design, continuing rate pressures and uncertainties over the land use decisions that were being pursued at the time led the board to postpone planning and funding for the treatment plant. Instead, that funding did shift over to our emergency water stations. Moving ahead in time, staff continue to monitor and report estimated costs for the plant as part of the capital planning process. By 2020, the estimated cost of the 2017 plan had risen from 70 million to 90 million. And by 2025, the same plant carried an estimated cost of

52:07 160 million, more than double the 2017 estimate. The primary drivers for that escalation were COVID area supply chain disruptions and broader inflationary pressures that drove up construction cost across the utility industry. Now we're in 2026 and the risk landscape has evolved significantly since the 2017 design was completed. Events of the past several years have made clear that a second source is not just an earthquake preparedness measure. The 2020 holiday farm fire and the 2024 ice storm both came close to causing citywide water outages. These are the kind of weather and climate driven events that we can expect more frequently with climate change. At the same time, Hayden Bridge is

52:52 aging. Key treatment processes are approaching the end of their useful life. Taking the the plant off for inspection, maintenance, and eventual upgrades will be an operational necessity by 2040. that requires a second source with enough capacity to carry the system while the plant is offline. This factor was discussed with the board last October. It is a newer and more immediate driver of this project that than it was in 2017. And then we have a factor unlike any other which is our water rights. Ew webb holds water rights on the Wamut River along with a permit that must be put to beneficial use by 2033 or risk forfeite. Water rights are among the most valuable commodities in the world. If we pass the deadline for putting water rights to

53:37 beneficial use under our current permit, they could be subject to additional conditions and restrictions moving forward. And [clears throat] we continue to see that play out in the legislative process. As you will see later in the presentation, permitting, construction, and commissioning a treatment plant takes about nine years from start to finish. Ew Webb has already begun that process and the current trajectory puts full commissioning in 2032. So the window for decision-making is narrowing and we have very little margin for further delay. Now I'm going to let Laura give you the details on the analysis. Thanks Karen. So we discussed the need and the risks surrounding the project and then the question is what actually is it? Uh we're proposing to build a new water treatment plant on the Wamtt River off

54:23 of McVey Highway. It'll consist of a raw water intake, a treatment plant, water storage, and the transmission pipeline. The raw water intake and the transmission pipeline are being designed to provide 30 million gallons a day. They're um hard to complete projects, so it's better to do that to the full buildout now. And then the treatment plant will have a varying capacity, which is what we're going to talk about next. So, you've heard us talk about 10 million gallons a day, 19.4, and 30 million gallons a day, but what does that really mean? In real world, this blue line on this graph represents what we produce at Hayden Bridge and pump into town. 10 million gallons a day, which is the purple line, that represents life safety. So that's residential indoor use only. So no industrial or commercial customers. It's

55:09 what the 2017 plant was designed for after an earthquake. Really just to keep people alive. At 19.4 MGD, that is our water rate. That also allows us to take Haydenbridge offline during the very lowest demand periods of the year. So think December, January, February times. That's um represents our lowest demands indoor use both for commercial, industrial and residential uses. And 30 MGD corresponds with our projected average day demand. That uh capacity would allow us to take Hayden Bridge off for extended periods uh during from about October until the end of April. really depends on the weather and when demands start ramping up.

55:56 So the first step we did is we did hire a consultant after we met with you in October and we went through the 2017 treatment plant. We started with that to validate the cost that we brought with to you. Uh what we found was that was really an initial build plant with a limited capacity. So as Karen had mentioned, it had been value engineered to meet the budget target of 2017. What that means is that it had full water treatment capacity that would match uh Hidden Bridg's finished water quality plus meet our customer expectations to 2.5 million gallons a day. That plant would then be able to be ramped up to 10 million gallons a day in the event of like a catastrophic event like an earthquake. What you didn't have was solids handling. So, it had solids handling up to that 2.5 million gallons a day. But the assumption was when you

56:42 had to ramp up to 10 that there would be opportunities to either pump and haul your solids or that you would be able to overflow directly to the river, which would likely be a permit violation. However, you know, in a regional event when you need the water, that would likely be forgiven. So, we did validate those costs. Um, they are $160 million and this is the treatment plant that all previous cost estimates have been based on. But as we mentioned with the new risk of Hayden Bridge coming um continuing to age and needing to take that offline, we need to take that offline during the winter time. So the Wamit and the Mackenzie River have very similar composition on an everyday kind of water flowing basis. But during storm events, the Wamut does have greater swings in organic material and higher turbidity,

57:28 which means that we need more treatment to handle the things that the river could bring at us. that 2017 plant didn't include ozone to a capacity that would allow us to treat for taste and odor in the wintertime or meet our customer expectations and we needed additional solids handling. So I said that was undersized. So what we did is we looked at what would happen if we look at those three capacities and bring all of that treatment back so that we can provide high quality water to meet customer expectations throughout the entire year including the winter time. So the first option is 10 MGD again um that is minimum life safety. Uh we brought in mechanical dewatering to handle the solids problem. We don't actually have

58:14 the land space available to build out a full lagoon system. Uh this includes ozone for full taste and odor and we did propose one 7 and 12 million gallon storage tank for both chlorine contact time which is required by the Oregon Health Authority and for operational flexibility. So that allows us to pump into the system over a given period of time. The cost for that, the preliminary costs for that are $269 million. This does include a 30% contingency. So the same with 19.4. It has the same treatment press um process but is scaled up. And I forgot to mention both all three of these options include the backbone infrastructure to expand the treatment plant out to 30 million gallons a day. So those costs are baked

58:59 into this to make that expansion relatively easy. Um this also includes 15 million gallons of storage that allows us to replace the operational functionality that Santa Clara is providing. Um and that has a preliminary cost estimate of $337 million. Again, this does have a 30% contingency included. And then we have the 30 MGD, which is the full buildout. um this plant if you were to select moving forward with this we would be able to treat high quality water at 19.4 MGD until we procure water acquire water rights. So we currently don't have that extra 10 MGD for water rights although we are exploring different avenues uh as ways to get those and that has a price of $392 million

59:48 and then as we discussed remaining a single source still comes with a lot of risks. So, um, we do need to take our finished water storage reservoir offline for inspection. It's been continuously online for just about 25 years now. We can't do that without building making some pretty significant infrastructure investments. Um, that would include having to rebuild our Santa Clara reservoir. We estimate those costs to be $75 million. That sites on locifiable soils, which would need to be mitigated and then also requires a large pump station in order to pump back into town. And then we would need to invest in our water storage program, our base level storage program. Currently, that program was laid out assuming that there was a second source of water that allowed us to have a lower storage capacity because we have that redundancy built in. But

1:00:34 without that redundancy, we would need to bring our days of storage up to provide some extra flexibility. Uh these numbers would bring us up to about one and a half days of storage in our system. And then we would need a pump station bypass around the finished water reservoir to continue providing water into town. All um said these are very rough order of magnitude costs. They're very high level planning. We have not done detailed engineering studies on them yet. Uh they all do have a very high contingency, but we are estimating that to be $235 million. However, that investment we still remain a single source. So all of the risks that we just talked about at the beginning are still risks that exist. and um we would then under that scenario we would not be utilizing our water rights by the date that they're extending putting them at

1:01:20 risk. So this is just a table comparing the cost. Um the 10 MGD 19.4 and 30 all put our all put our water rights to partial use except for alternative five. And so really the why we're recommending 19.4 or um why now? So it is cheapest to build this out to a capacity that we need rather than phasing it. Phasing can add up to 50% to the total project costs. Uh as we said, you know, Hidden Bridge time keeps moving forward. So it takes about nine years to start and finish these projects. So with phasing, um we actually don't have enough time that we could effectively phase it and

1:02:05 have Hayden Bridge offline by 2040. And as Karen mentioned, we have secured uh permits for this. Those permits start to expire in 2032. Um the process to get those is long and it's complicated. As you'll see on the next slide, we have learned that there's certain parts of the permit that if the extension process requires us to reapply, meaning that we would have to go through the environmental rules of whatever the leg, whatever the rules are at the time that they expire, so in 2032. And then the water rights, we really can't emphasize those enough. We have the fifth oldest water rights on the Wamit River. They are priceless. Um, and we should be putting them to use. So, this is what the permitting process looks like. We're not going to have you memorize it or ask

1:02:51 you any quiz questions, but it is a very complicated process. It has taken over two years to get through all of the environmental studies and the reviews. We have um our DSL state permit has been issued. We have our army corps permits been conditionally approved based on the department of environmental quality approving the 401 certification which is dependent on land use. So we have been running through the land use process concurrently with this. Um, we are almost through the code and development code and refinement plan amendments that were required in order to make our lot buildable. The city council has taken action and approved it and the county is taking action tomorrow to vote on our amendments and then we're currently

1:03:38 working on the process to get through the next step. So, we anticipate that we'll have approval for those before the end of the year. So, we'll have our permits in hand ready to go to construction. So, as part of our land use working with my partner Claire Ray, we really did a lot of work um doing outreach for our land use applications. We did have 25 comments and letters of support. None were in opposition. Uh we've also been reaching out to different intergovernmental partners uh just to develop support for the project. And then we've started establishing relationships with neighbors across the river and homeowners and the businesses that'll be affected by construction. We also preemptively reached out to environmental groups to let them know

1:04:23 that the public comment period for our permits was coming up and invited them to uh make comment on our application. Uh we did not have any in opposition to this project. Next in August you will see a more tactical communication plan really to discuss the rates and how we're going to communicate that to the public. But in order to develop that, we really need to have a direction forward. So there is more to come on the communication front. >> So as Laura said, we we can't give you rate impact information just yet, but I do want to make a few points about our finances. So, first, uh, today the average single family residents using 9,000 gallons a month pays around a $150 a day for drinking water, which we

1:05:08 believe is a remarkable value for one of the most essential services a community can provide. On this slide, all but three communities shown have invested in or are investing in multiple sources of drinking water. Ew is the largest that is still on a single source. This vulnerability is reflected in our water rates, which are among the lowest in the region, partly due to us not yet making this investment. All utilities are experiencing higher than expected costs of infrastructure renewal and replacement and are likely to raise their rates. Because rate pressures are regional, we anticipate EWB's water rates will land in the middle tier among regional utilities even after the investment required to construct a second source treatment plant. And as you've heard tonight, there are no lowcost alternatives to prepare EW Webb

1:05:56 uh EW Webb's water system for the challenges ahead. Despite the investment required, EW's water rates are expected to remain competitive regionally. I'd also like to just talk briefly about some um uh evaluating that we have done on funding options. So an investment of this scale is going to have significant rate imp implications to our customers. We know that we take the value of affordability seriously by making wise investments and controlling costs and rates, which is why we continue to evaluate various financing and funding options for this project. With our traditional borrowing method of issuing revenue bonds, we could extend the repayment terms up to 40 years and still successfully market the debt. There are

1:06:42 also structured repayment plans that could allow us to defer principal costs and contribute to easing the rate trajectory. FEMA's building resilient infrastructure and communities and EPA's water infrastructure financing and innovation act are federal programs um that are available to us, but they could add project costs due to the federal procurement process that is required which can be up to 10%. Brick grants may offer a a portion of funding and that portion right now is 20 million as the project cap while is a loan program that offers greater flexibility in the repayment structure. Though the interest rate is less favorable than our traditional financing options in current market conditions as we have just discovered through our bond price uh pricing that we just went

1:07:28 through last month. staff met with various state agencies through business Oregon to better understand the grant and loan options available to us for this project. But unfortunately, EW Webb does not qualify for most of the programs they represent. The one that they do represent that we do qualify for is the state revolving loan fund with bipartisan infrastructure law funding. So, we will continue to look at that, but at this point, um still probably better for us to bond fund our our project at this point in time. With further board direction on the project, the federal program applications will be more competitive with timing of the project and we will be able to provide detailed rate projections based on the alternatives selected. So again, we look forward to your direction on that. We do know how

1:08:14 important the rate impact is to our customers and we do uh plan to come back next month with details on that um and answer your questions at that point on the funding. Moving on to our contracting options. Last October, the board authorized us to develop uh the preliminary design alternatives that we presented tonight. Part of our cost control options do come from the contracting method that we select. And to move forward, we need your direction on the contracting method for the remainder of the project. The team evaluated two methods for project delivery. The first is design bid build. This involves creating final design documents, bidding the project, and awarding to the lowest responsible bidder. This is a common delivery method that we use routinely in the water

1:09:00 department. Because of the size and complexity of the treatment plant, we also looked at the construction manager general contractor method. This would get a contractor involved in the early stages, which is beneficial because they provide input on the design decisions and estimating and value engineering. Under this method, the contract would develop a guaranteed maximum price before construction starts. And this is a common delivery method for large and complex projects. After reviewing the pros and cons for each method, staff do recommend using the CMGC method for the treatment plant because we believe it will result in the greatest uh competition among contractors and will give the team earlier uh cost certainty. Since the pipeline project is more

1:09:45 routine for us, we do recommend uh pursuing the design bid build for that portion as we have plenty of experience with that as a contracting method. And then we'll continue to evaluate options for the raw water intake moving forward. Do want to cover some opportunities for the board to have oversight on this process. So, the CMGC process has built-in stage gates, much like the design bid build, but the first decision that we're asking for tonight is authorization to procure a CMGC and an owner's rep. We would then bring that contract to you likely at the end of this year for review and approval. And with that would come the financing for the project in 2027.

1:10:32 In the CMGC model, the board will receive updates on costs at key decision points that 60 and 90% design milestones. The board would then be asked to approve the guaranteed maximum price, which would likely happen in late 27, early 28 before any construction begins. So, there are multiple points in time in which the board can weigh in on this project. nearing the end here. I want to just uh conclude here that there that there is significance in the board's direction tonight. If you haven't heard that already from both Laura and myself, your selection of a preferred alternative will set a target for the engineering team. Will also inform the water master plan, which is critical for us in

1:11:18 figuring out the next 20 years worth of work that we will do to keep this system running. Part of that is also to include a facilities plan in the out years of that 20-year period for Haydenbridge to to get finer point details on what is needed to keep Hayden Bridge running into the future. It also gives internal teams the information they need to develop the clear rate and communications plans. By selecting a contracting method, you you're enabling the team to maintain momentum on the project, building off successful permitting and land use efforts that you heard about from Laura and setting the framework for the successful delivery of the remainder of the project and getting greater certainty on the costs. So with that, we are going to hold on

1:12:04 this and take your questions. Also have time for deliberation and uh we have lots of extra experts in the room. So, if we can't answer your questions, I'm sure we can find someone who can. >> Thank you. Unknown if we got 31 minutes left on this agenda item, but I'm suspect we may have more questions than time. So, we may look for an an extension of time because this is probably one of the biggest decisions we'll make in a long time. So, Sonia, >> thank you. >> Well, I was here when we made the decision in 2017 to hold off and over the last year or so as we've looked at the costs escalate few years. as we've looked at the cost escalate. It has been one of the greatest regrets um of my time on the board that we um held off on

1:12:49 that. However, I appreciate your presentation tonight because it actually enlightened me a little bit more about what was presented that night versus what's possible. And I I think that this is a better plan. So, I do appreciate having the option to look at the 19.4 that fully utilizes our water rights. I think we would have been in a situation if we had voted on that then of how do we perfect the rest of our water rights. Um that to me is absolutely critical. We have to perfect those water rights. I also read in the packet please correct me if I I misread this but we asked for an extension in 2004 and never got a response.

1:13:38 >> See this am I okay? There w there was a question that we asked earlier if if we could get an extension because this still feels like a very tight timeline in order to hit when when those are. But if that is the case and we asked for it and they never responded, still have not responded, um either they lost our application or we have no chance of getting those extended. Either way, to me that's an unacceptable outcome. We we need to perfect our water rights and secure those. So I'm very comfortable supporting the 19.4 for with all of the reservations. That is a lot of money. It's going to put great strain on our community. Um, which I will never do lightly. And that's part of the reason why we held off in 2017 because we were trying to partner with our other community partners um to see if we could

1:14:24 get, you know, a combined treatment plant and at the same time make sure that we had some resiliency if the Cascadia subduction zone earthquake happened during that timeline. while we were trying to create a better partnership. Um it's clear to me that that is not possible and we need to do what we need to do for our citizens um that we serve and our customers that we serve. So thank you and very supportive of option three. >> Thank you for your presentation and for um this very thorough packet of information. you guys really laid out a um compelling argument and gave a lot of supporting material. When I joined the

1:15:09 board in 2019, there was a lot of work that was being done in the community about resiliency. I don't know if there was a grant or something that happened, but it was um e webb was part of it, the county, the city, the university. There was a lot of talk about how as a community we can become more resilient. And a lot of people in many of those presentations kept looking to EW Webb and using EW Webb as an example of an organization that was taking resiliency really um really seriously. And so I think that this is just an extension of that and how forward thinking that we are. Um I know that probably the the biggest thing the hardest thing is just the price tag associated with it. But I want to point out that if we don't if we

1:15:54 do nothing with a second treatment plant that we're still going to have to pay roughly $235 million. So it's not like we're looking at 0 versus some of these amounts. Um so I think that's really important to point out that we could still spend $235 million and not get us any closer to having a second treatment plant. Um I'm highly supportive of option three. I think it's something that's really important for our community. I think that um if we're scared off by the cost now, it's only going to exponentially increase. And so, as hard as it is to um look to spend that kind of money, I think that it is money absolutely well spent.

1:16:44 >> Thank you, President. Um before I get to comments, just a quick question just to make sure I have an understanding for the 2026 plans. Um my understanding is that they are uh with exception of I think option four that they can be in the future up upgraded. They can be built out further to take in more. Is that correct? >> Correct. So, um, alternative two and three both include, uh, the ability to expand them to 30 MGD. And we would do the preliminary work, um, the kind of the harder stuff like the site work and the piping. Uh, we would do all of that now to prepare for it to make that expansion relatively simpler. >> Thank you. And I assume option four is just because that's already the biggest. So, yeah, what are we doing there? Um, and as I'm I'm sure my colleagues were

1:17:30 all up at midnight reading the board packet. I tried to count how many times you used the word direction. It was like 30. So, I get it. You're looking for direction. Um, one of the most uh memorable comments I think from the ice storm that I remember is how close Hidden Bridge was uh to shutting down. How how close we were. I think it was within an hour or so if memory serves. And so that's what's top of mind to me of what we're looking at and what resiliency truly is is during an emergency, we have a a redundancy, an opportunity to not just be kind of caught with our pants down just to be direct and and really support our community as as best as we can. Um the three pillars that are critical to me

1:18:16 are um emergency resiliency, uh making sure that we're using our water rights, and then we're investing in ourselves. And I think that option three really does all three of those things. Um that we're being prudent with our our money and we're being prudent with our future. Some of the most expensive things right now for us right now are folks in the past that didn't do this this long-term thinking or put in this much time and effort into future planning. Um, and I just want to give you both your your kudos, you and your team for doing that work and putting in this much time and energy and effort to to really thinking through every single part of this. Um, I uh I support option three. I think

1:19:01 that that's the the smartest move that we could make. Um my hope is that uh by giving direction and by us um providing that that it will also open up opportunities to find cost-saving measures like grants and other things that that are available or could be available in the near future so that we can start lowering that that dollar amount. That's also a deep concern for me. But but I think um this is the the direction I want to see us go. So, thank you. >> Thank you. Um, I I think I I can see where the the board's going. Um, but I would also like you guys to consider option four,

1:19:46 which is the 30 million gallon one. Um, and the reason that I want to consider that is for for a couple of things that were brought up in the presentation. One was that back in 2009 it got put off because of rate pressure. It was at $120 million in 2009 and we put it off because of rate pressure. The other thing Laura brought up the fact that phasing adds 50% to the cost of of doing it. So, if we if that were the case, the extra $55 million that is is proposed there would jump to $110 million if we phased it. Um,

1:20:32 the fact that that we couldn't take Hayden Bridge offline for a extended period of time gives me pause. Again, I I am totally down with with where we're at with our with our rate pressures. It'll be a few do. It might be an extra dollar a month perhaps. I'm not sure. We'll we'll find out what those numbers are. But for me, I would really like this board to really consider thinking big and thinking long-term rather than a 50 cent or whatever that that rate pressure is going to be because if we step up and and do it the right way, one, we do have the

1:21:19 opportunity because Hayden Bridge is from what has been represented to us is going to need some to go offline and not for a week. It's going to need to go offline for the six months that we can do it. That won't happen at 19 million. Again, think cost benefit 337 to 392. It seems like a lot. It's $50 million. I understand $50 million is a lot of money. 235 to do nothing. 337, which is I think where the board can easily fall tonight. or 392. So I I asked the board to kind of consider those thoughts when making this recommendation because I would move

1:22:04 towards option four. We can always cut back, but if we if we do a a design build or and bring it up to 60 and 90%, we still have jumping off ramps that we can say no, we can't do that. we or next month when we see the actual dollars of what that's going to be. Please consider that. That's all that I would like to say. >> And I'm going to jump in and we're going to have plenty of time for a second round. Um I support CMGC and I'm right now um option three, but I want to give credence to what he said. If we don't have water rights for option four, correct? So we would be building a plant that we don't have a right to take. We can't use that capacity until we get a water right. If we don't get the water

1:22:50 right, then we have built capacity that's we can't use. Correct. >> That is correct. >> Okay. Um, now my other question. So I represent everybody north and east of the river. We don't have a reservoir. You're taking it away. So all my water has to come from South Eugene and the most vulnerable part of the infrastructure is the river crossings. Is there any money in there to harden those crossings on the bike bridges and in Nickerbacher and Aaso and all those other places on the one on the ground? Um, so the people I represent have a little bit more reliable water because if we have this event, um, we're we don't have any water. We don't have reservoir because you're taking it away. >> The reservoir in North Eugene >> South. Yes. Santa Clara. >> Yeah. So, we do have money and other

1:23:36 projects that are in other parts of the capital plan that are looking at our transmission system and hardening that. >> Okay. Thank you. And a couple other things. I noticed that spring Springfield got a grant. Grants Pass got a grant and so I hope that we are pursuing grants because I mean anywhere from seven million to$50 million dollars that they got. So every every million helps. I I understand that. And then when you're pursuing water rights, um I don't know what happened to Agropax water right, but remember they used to take hundreds of thousands of gallons of water at the WMT at our old headquarters. And then also IP and Millersburg when they had the pulp mill. They're selling water rights. I don't know if you have been following that. They Yeah, they've been selling some I think uh um couple of the communities down in Portland just bought um pretty significant portion of but they're still selling them. I think if we could reach out to them and see because I don't know

1:24:22 if they we go upstream and get them but >> and we do we have been working with our water rights consultant gsi and we do have a memo with a table of options to pursue to uh start acquiring those rights and buying industrial rights is one of those options. Okay. And then the financial part. Um so we have this predicted consumption and rates and money generated to serve debt. But when if our rates go up 160% or from 40 to 104 wherever they're going to go um I think a lot of people are going to stop irrigating and and things and so consumption is going to go down. And how what decline in consumption did we predict in our revenue projections to serve that for this uh uh in either either one of

1:25:11 >> so we will work on based on board direction we'll work on modeling rates but currently we do not forecast uh a drop in consumption. You're acknowledging though a very real possibility and what that will do is that will put more pressure on a reduced amount of consumption. >> I'll go to second round. Sonia, >> um to Commissioner Barski's point about um number four, I I looked at that as well and I would love to get us to 30. How long does it usually take? I mean, I I don't know how often water rights are sold. So, that's question one. And then question two, um I think if we go down

1:25:57 the path of option three and we kind of in parallel looked at can we get water rights while we're building out the plant, is there an a decision point? If we go back to the kind of decision tree timeline, if we said, hey, we have the opportunity to get these and we haven't started building yet that we could um kind of switch to option four. Is does that have to be done now or is there a point in the future that we could kind of explore both options simultaneously? I can handle the question about expanding and changing. So you we would be able to expand and change the design. It would take time and it would cost some additional funds for

1:26:42 engineering and CMGC time. But um like I said, most of the backbone infrastructure and site work is already we're laying it out to include that 30 MGD. So it would be possible. >> Okay. So, >> but it would cost more. >> It would cost more than voting tonight to do that, but we also don't know if we can get the water rights. >> Yeah, it's likely easier to scale back. Just can remove pieces out of the design. >> Okay. So, if we voted on option four and said yes, go forward with this and then we gave ourselves a a timeline to try to procure water rights. I just don't want to put our current water rights at risk. That's that's my my main fear. I mean, option

1:27:27 three is already going to be tight, I would assume, to get us to perfect the water rights by the time that they expire. And so if we start monkeying around with these other options, even though I'm playing devil's advocate and asking, um, we could we could run the risk of possibly going too far and not being able to perfect our water rights. That a real threat? >> That is um, correct. However, I mean, there is an extension process and at that point in time, we would be making meaningful like forward progress on getting this up and running. So I would imagine that that makes the extension process less risky than if we were doing nothing. >> Okay, great. [snorts] Thank you.

1:28:12 >> On the water rights, so we did ask a while ago about what's out there right now. Um, this was before me hearing anything about Millersburg possibly selling some rights, but they were scraps of rights that you would have to cobble together from multiple locations. So it it that didn't look terribly promising at the time. So I would just mention that. >> Yeah. Um just to add I think you know the the the real question for us or the challenge will be perfecting the current rights. Um you know it is a tight timeline. So even if we you know go with option three u being able to build that and get it online um it's going to be a tight timeline before what 2033 where we

1:29:00 would have the um deadline for those to perfect those rights. I think the positive thing is we should be far enough down the road like what Karen and Laura was saying that um it would be a little bit I don't want to say easier but there would be a lot of um supporting evidence that we should go ahead and be able to extend those rights but I do think that part of this has to be us looking to extend those rights from the day we get guidance at home. >> Okay. I mean, I was just Do you want to go in the same order? We will, Mindy. >> Yeah. Um, so to to John's suggestion about alternative 4, you're the experts. You know much more

1:29:46 about this than we do. Um, and you've really obviously dug into it. And you have recommended alternative three. So, have you recommended alternative three because you feel like that is a number that the board can stomach or because you truly think that that is our best option and that is what we should go with. We recommended alternative three because we do have the water rights so there is a little more certainty and it felt like a more palatable number. But I will say alternative four, you know, if you take aside all of the rate impacts, if you just look at project costs, that is the um cheapest alternative for total project costs is to build it all the way out to the 30

1:30:31 MGD. So, I don't know if you're able to answer this or willing to answer it, but if um if you weren't worried about what we would say about the cost necessarily or think that um that that was a huge factor, would you recommend alternative 4 over alternative three? I know that puts you in a weird position to answer that question. [laughter] >> Well, let me uh throw a lifeline here. [laughter] You might have just saved me from myself, >> Commissioner Slober. I So that's a good question, but I think it has kind of it's multiaceted because um you know, when you say if cost is not a

1:31:16 consideration, well, um then you also have to throw in, you know, what you're doing financially for the organization. Um you know, what we're weighing really heavily is um how of how will the financial performance of the organization be after making this type of investment? This is likely the largest investment the water utility will be making u in its history. So u being able to you know I mentioned earlier the rating agencies uh we have to make sure that we're staying in good standing with them and it's not having a detrimental impact on our ability to to bond those types of things. Uh so it's a much broader consideration than just that number that we see up there. So in best case scenario um Laura's right you

1:32:01 know in terms of dollars per million gallons um the 30 million gallon scenario would be the best approach to take uh but when you're balancing affordability uh financial health of the organization etc. um you know the sweet spot for us was option three uh and that will come with some heavy heavy impact uh from a rates perspective but for all of the reasons that have been stated um it's an important u step to take as an organization for the community. >> So I think that I am still in favor of alternative three. >> Thank you president. Um, I think I set myself up uh when I said that the most

1:32:48 expensive decisions we're making today are the past ones that haven't been made. So, uh, yeah, to Commissioner Barovsky's point of considering option four, I I I want to understand as in depth as possible of the water rights timeline of the difference between four and three. Is what like is it is it days, is it months, is it years? Is there any difference at all? Like can you answer that question of of the sighting of the water rights for the the option three or option four? Is there a difference? >> Do you mean the the time to to get an extension on the permit that we have or are you talking about the time it would take to get the additional water rights?

1:33:34 >> The time it would take to get the extension essentially. Yeah. >> Okay. If we do not have access to the water rights for the 30 uh for option four, um does it harm the ability to get an exception? >> If we build if if we build to 30, does it hurt our ability to and we only use 19.4. Does it hurt our ability to extend those water rates? No, because we need to show what we're using. So, we would be using the full rate. >> I just want to make sure I'm thinking through everything, which I know you have. I appreciate that. And you know, the the intake itself is being permitted for 30 MGD and being constructed to 30 MGD. And so, um, no, that would not hurt us on the extension that I know of. I

1:34:20 mean, I'm not also not a water rights attorney or super expert, but hey, me neither. I hear you. Um I am comfortable exploring option four and moving forward like advocating for that recommendation with a very specific jump off point or a very specific checkpoint for us to say this is our no our go no-go date of moving forward with that. Um I do what resonates really soundly with me is it is fiscally prudent to consider option four as the the most cost-effective method. Um I think you one of your slides was uh co risk and cost landscape and you very uh

1:35:06 uh thankfully did not put 2020 you put the holiday farmfire but did not put COVID and I think that that's been a continuous conversation is that ever since 2020 every year it is more expensive the cost of labor the cost of construction it and there is absolutely no sign of it going down from this point forward. So, um, that is what is resonating with me. So, I'm I'm comfortable advocating for option four with a specific go no-go date. Um, otherwise, I'm I'm comfortable supporting option three. Thank you, >> John. And then I'll jump in and then Sonia has another question. >> Great. Um, thank you for you all considering the proposal that I put out there. Um, couple of the other reasons that I'm I'm leaning into that. um is

1:35:54 one the people that are sitting at the table, specifically Laura, and her ability to bring in projects at or below cost in this construction cycle that we've had. We've seen her do that at College Hill and at East 40th. So, uh, working with the CMGC type of thing, we've got a really good project manager who has has brought in big projects at or below cost. Leaning into that is something that I am, you know, when you find good people that can do the job, now is the time. Strike while the iron is hot. I don't, you know, we're talking 2032, 203. I don't know how old Miss

1:36:43 Faring is, but I do know that I would like to have her complete this project uh as our as our project manager. The other thing that I'm encouraged by was the the presentation that we got earlier from the general manager when he talked about how we went out and sold water bonds and had a robust competition for those bonds at this point. So, we're in a market right now where we are looked at favorably in the bond market. We have a uh project manager that I think could land this and we we have it at the what we think can be the best most long-term prudent price tag for this. As

1:37:29 far as 30 million, if we if we design build it to 30 million gallons and can't acquire those rights, we still we still don't lose our water rights at 19.4 million gallons. those are there because we're going to be building that thing and saying we're going to take 19.4 and we're going to do everything we can to get the the extra 11 million gallons. There's an opportunity at the at the federal level with stored water, right? We've got stored water right up above our intake at Dexter and Lookout Dam that aren't counted as as water rights that are available at this point. But there has been an ongoing conversation about what is the what who can access

1:38:15 that stored water that is only 15 miles up from where we're at and there's billions of gallons of water between Lookout and and Dexter Reservoir. So I I believe that there is a path forward to the 30 million gallons and I think it's prudent for us to do it. So I appreciate the rest of my board members uh considering that. So thank you. Hey. Um um couple quick comments. Number one, have you ever heard of golden handcuffs, so you're staying until you're done with this project? That's an aside, but um uh I know the Springfield subs water intake is just above ours on the Wamut and it's aging and it's going to need to be replaced very soon. And uh they're doing the other one on the McKenzie now. And so they're going to be strained. So I'm

1:39:00 I'm not concerned about if we build the 30 million that you know even if we don't have the water right if if we needed an interim treatment for their water right we could do that but more more importantly I think we're going to become a regional water supplier whether we want to or not you look for Cottage Grove Creswell Junction City Coonita where they get their water it's all groundwater but a lot of it's challenged and they don't have the resources that we have from the major rivers and their base fed re resources and so we become a regional water fire that's going to be critical and so I'm going to change my tune from three to four. I'm okay with that because I mean it's going to be a significant rate impact and we're going to have to deal with it. But you're absolutely right the scale of economies build it out and uh and bite the bullet

1:39:45 and it was just you know like when our predecessors years ago said we we want to we want to build Carmen and into a nuclear plant and at the time it didn't make sense but the community rallied behind it. I think in the future we're I'll be in the box of the shelf, but people will say maybe there was some foresight there because where else are these bedroom communities going to get their water? It's not the supply isn't going to increase. It's decreasing. The groundwater supply is decreasing. It's going to be surface water. And that's the one thing that we have. And so I would vote for um option four. Tanya, >> thank you. Now I have several questions. Okay. Um,

1:40:31 you all have gone through several different iterations of permitting. If we chose option four, would that change any of that permitting process? >> It would not because we permitted everything to the 30 MGD so that we wouldn't have to do it again in the future whenever anybody decided to build it out. >> Got it. Okay. um the cost of water rights are not built into that cost because we don't know how much they would be. I have no clue what that cost might be if anybody I mean it's it's kind of up to the holder, right? in in what they can get on the market. And if we build it and can't supply it, it puts us in a I'm

1:41:19 just saying that it it puts us in a a position where it's not like we can negotiate later. I'm not saying it's not a good idea. It just it it does concern me because we want to build it out. we want to use it to the highest extent and maybe um you know somebody takes advantage of that in a a different way um if we go with option four now so it's just one thing I'm considering um we have talked about our debt to surface ratio and I think the option three at this point already puts us in a more challenging position is that correct or can we bear the option for

1:42:06 >> that will depend on what kind of rate increases uh the board can tolerate. So when we come back in August, we will have built into uh the long-term financial plan the rate increases necessary to support the debt service. And yes, debt service will be driving future rate increases. >> Okay. Um, if we went to option four again, are we at risk of losing out on actually getting it done by the 2033 date for our the for the water rights that we do have?

1:42:55 >> There's still a long process to go through design, but you know, you would already be there and be constructing. So, um, originally this construction project had a three-year timeline. So, but it will be it will be no matter what we build, it's still going to be a tricky build because the site is small, but it likely could be done, but delays, you know, if we keep delaying, um, that'll shift the start date. >> Okay. >> I was just going to say, I mean, the reality is it will be awfully tight. Um, you know, I mean, Laura's fantastic, but there's a lot of other variables that factor into that. So, we should go into this mindset knowing that it's going to be at the wire. Um, but the important

1:43:41 thing is that like Laura was saying, we would have done some construction, maybe the intakes would have been completed, so that would demonstrate substantial performance, so to speak. And I think that would enhance our ability to get an extension on our current water rights. Um not to speak at the additional ones we would need. >> Okay. So um and again, pardon my ignorance around water rights, but the other communities that um Commissioner Brown mentioned that might want to have us serve water for them. Um, I mean, not that we need that given that we need this to support kind of our basic level, but they they have groundwater rights, correct? They don't have surface water rights. So, it's not like they could

1:44:26 transfer their rights to us and we could use them at this plant. is that I mean that would be my understanding that they that the water rights that they have are for the water that's you know wells and other things that are in the location where they're located not on the waamett those things are not transferable sorts of things you have to have water rights to that particular water source correct correct okay thank you um and then finally and this just again gets back to my question about kind of the perfection of water rights and and hopefully this will be fine You know, either way, we choose option three or four. We're on a pathway to perfect them. But it it's just killing me. Um on page 10 or sorry, uh 145 of

1:45:13 our packet, it says, "Ew submitted an extension application for permit S-27441 to the Oregon Water Resources Department requesting more time to develop it." And that was on January 6 of 20 of 2004. This says they provided a public notice of extension but to date the proposed final order has not been issued. Is that for the water rights that are in question here or is that a different historical fact just for example? >> I'm catching up. It was in the appendex from the uh board meeting in October that we submitted and that is just a historical we included the historical account. Um, we've been keeping a running account of everything that's happened with development from this and so that was a thing that happened.

1:45:59 However, we moved our water, right? And everything has been >> okay. >> As far as I know, sorted out. I don't know that. >> So, this is like an open extension request from 22 year years ago that they haven't responded to necessarily >> and I may have gotten and I can look into it to find um exactly what happened. I can dig into the historical documents. I know where they all are now. But the um we then moved our water right and went through a whole process and uh then we also applied for a permit and the permit is what that extension date is. So my thought is that probably has been resolved. >> Okay. Okay. This is not an outstanding thing. It was just part of the historical context. Okay. Great. Thank you. >> And that happened after 2004. I'm glad that you read that because I was trying

1:46:44 to figure out where that was in the packet. But >> anyway, it I mean we're talking th this is of utmost importance to me that we nail perfecting the 19.4 water rates that we do have. And then I would love to go to 30. I'm very concerned about the impact that we have on on water to our you know the rates to our current customers. I mean, I have a house. It was built and there's nobody living in it and there's like very minimal electricity and water and it's $111 for no one in it a month and that's s that's significant. And so it

1:47:29 it hurts and I but I also want to set us up and be forward thinking as a community. and you know it's risky to look at the 30 million because we don't have the water rights for it. So my my general leaning still I think is to support option three with trepidation. Thank you. >> Okay, do you have any questions or comments? >> Clear. I mean, it looks like whatever it is we direction we give you tonight, it's to go ahead with the what second source. So, that's great. I just want to know if we went ahead if the board did

1:48:14 give direction for option number four. I mean, you you said it's kind of a multiaceted decision. Would that I guess I want to know if that would be overreach or too much just because you staff recommended option three. So, I just want to make sure that we're not um giving direction or approving something that actually would not be the most beneficial. I don't know how that can be answered, but >> yeah. So, I I would I would say that it's not an overreach. >> It's actually good forward thinking. I mean, it's something that we should be

1:48:59 considering given, you know, the long-term vision for what we want to provide the community. The challenge will be when we get the direction and then come back with the costs and the rate impacts, it's going to be really about affordability and and what do we want to take on? I mean, the real difference here is between option five, the difference between option five and option three and option four. So, you're looking at whatundred and U$2 million and and and then looking at probably, you know, what 60 somewhere in there. Um and then what the difference are. Uh we've been working hard to try to figure out a a good way of smoothing these costs. Um

1:49:45 and we're going to continue to do that. This guidance will allow us to be able to work on that during the meantime. And I would say, you know, board needs to I think you've been really asking great questions. Um, and I think on the right path, vote the direction you think we ought to go. And then I think the job for us is to go back and try to figure out how to make it work within a financial context. And then we still have a decision to make. Uh, you know, we can come back and like Laura said, pair it down if we need to to see if it gets us in the appropriate range for rates. Um, or if we're comfortable with it, just forge forward. But um you know I think we uh Deborah and the finance team are doing a great job working to

1:50:30 see how we can you know make any of these options work with the least amount of impact to our our customers. >> You have final comment and then we'll call a question. >> Yeah. Thank you. Yeah. Um, I think where my thought process is is recognizing where we're at. Just, you know, we're not in a bubble as a community. And, um, and I mean that in so many different ways in that like the staff that is recommending this are also customers that will be paying this as well. Um, and on the other side that we're in a bubble of um, or we're not in a bubble of we're seeing higher prices than ever before. We're seeing federal and state uh support systems crumbling. We're seeing a lot of uh high costs

1:51:16 and we are seeing from EW's perspective a historic investment in our customer care program to help lower income customers as well. And so I think that's where my thought process is in that I know that what we're the decision we're making today is going to affect some of the most vulnerable folks. We do have a commitment and have put pen to paper on that commitment for supporting those folks in paying their bills. And my concern is if we don't put forward a forward-thinking plan, future customers will be even more adversely affected by that decision than than today's customers. Um, so that's where my thought process is.

1:52:02 Um, I have really appreciated staff's perspective saying that that as if we do decide to go forward uh with option four, it is easier to tear down than it is to build up. Um, and I think that's where I'm at when I'm as I'm making this decision. So, >> thank you, John. Uh, I guess we're probably looking for a motion. So, I'm going to move I I'll make the motion to move forward with option four. Um, we haven't had much uh discussion about the CMGC and and that, but I I'm comfortable. Do you want separate discussions and motions on that? But I'm comfortable with the with the uh recommendations that staff had on

1:52:49 those. So, I'm going to move forward with option four and CMGC for the treatment plant, DBB for the pipeline, and then the intake TBD. >> I'll second it. Non discussion. Yeah, I'm gonna say I will vote for this because I think it's really important that we we move forward and um consensus, but I will just say my my probably the biggest trepidation is that when we go with this higher price tag, then it makes us make harder decisions on other things as well. And so when I think that our um watershed recovery fee is going away or went away at the end of

1:53:34 last month and we're going to be talking about it next month or in the next couple months about what are we going to do to invest in the watershed and that would raise water rates if we decided to incur some kind of fee or raise rates for that. That making a decision like that does impact some of those other decisions and I think that those things are really important too. I'll jump in the queue if I may because I didn't get a third round. Anyhow, I'm just going to say that I'm just doing the math that we have six reservoirs above our intake on the Wam um count including Hills Creek. But anyhow, there's six up there and there's billions of gallons of water that aren't counted in this. And you look what's going on right now. Junction City's got a building moratorium because they can't their their effluent system is down and their BOD levels too high. Creswell has

1:54:20 got a moratorium. They can't because of the coast. And so that's coming to all these communities that discharge into these smaller streams and things. And so I still think we're going to be a regional water supplier. I mean, I don't know what it is, but look what we do for Venita. You know, we give them 400,000 gallons a day, I think, isn't it? Plus or minus. And they they love it. They built the water line and everything else. And we make money on it because that's why Medford's rates are lower than everybody else's. They're a regional water supplier, and it's a fixed rate commodity. It cost the same to deliver 15 million gallons a day as it does 25 minus $5 for the chemicals and a little bit of pumping. So, um I'm going to support the motion and uh know that we can pair it back if we have to. Um I know that preliminary rate

1:55:05 adjustments I've seen said we're going to go to $85 from 40 to 85 without a second source and and from 85 to 104 with the second source at 194. And so it's not incremental. It it's it's money, but um go look at that rate chart. Look what you pay for water in Cobra. Right now, you pay over $100 a month. Same thing with Creswell. And it's it's going to happen all around. It's going to get only worse in my opinion. So, I'm going to support the motion, Sonia. >> Okay. Well, we we've come around and changed here. I I'm still very concerned. I mean, this is [laughter] the original 70 million that I voted down in 2017 is now the

1:55:50 difference between option three and four. And we haven't even paid for water rights. So, if we have to get another 11 million in water rights, we have no idea what that cost is. Um, but I do appreciate that the whole reason that we're building it to 30 is that we really need that to take Hayden Bridge offline. So, somehow we're going to have to figure this out. Um, but again, the cost is it's very large and I I do appreciate that we can take things away easier than we can build them back out. Um, I'll support the majority of the group on this and go with option four, but I'm going to be very critical about

1:56:35 any of those other cost increases and where we're getting these water rates from and where the offramps are um to avoid that cost if we really can't hit the 30. >> Okay, I think I've heard from everybody. So there's a motion on the floor to support option four and and uh in CMGC. I guess we'll just bundle them together if you're okay with that. >> That's what the motion was. >> Okay. And and so I'm I'm going to call the question unless there's further discussion. All those in favor uh for option four of the CMGC option, please signify by saying I and raise your hand. >> I passes unanimously. Thank you very much. >> Thank you. And this quick last bit is just to let

1:57:22 you know we will be back next month. We will have long-term financial plan information for you including the rate trajectory for the option that you've selected. Uh we will have a communication plan in more depth and we will begin at that point assuming you approve of that plan. We'll begin uh beating the streets and getting word out about the decision where we're headed with it. We'll also bring to you the alternative procurement process request and then you'll also have another option in December to you know shift again based on the budget and our CMGC request. So more more to come. Thank you all very much. >> Thank you. I'm going to break and we'll re reconvene at 7:35. Thank you.

2:07:24 and go to our next agenda item which is agenda item n number 10. It's electric utility the annual capital improvement plan assumptions. They're looking for direction on this brown. >> Still waiting for Deborah. >> Oh, Deborah's 50 million. >> No, thank you. I'm out.

2:08:09 We need her to start before we can begin. >> You know, actually, uh, we can get going and then she can join us. I think she's got kind of the tail end of the presentation. So, >> yeah, the money always talks last. [laughter] >> Yeah. >> All right. So, um, we can get going. U, we're here for the electric utility inte um integrated capital improvement and long-term financial plan. Uh the first slide as you can kind of see is a photo of a ribbon cutting for Kieran substation that took place in November of 2024. So I just wanted to kind of make note of that. Um Kieran, if you don't know, is the largest substation in Eb's uh fleet and was completely rebuilt

2:08:54 with modern equipment and earthquake resiliency um in mind. So um something that we are proud of and and and what our team has been able to u put together. Now um go to the next slide. So uh according to board policy SD6 financial policies and Oregon statutes require u staff to prepare a balanced uh water and electric utility budget uh for the board's approval by the end of the calendar year. So to prepare budgets u management is seeking board's direction on the topics shown on this slide here. Now um note there's a change in the process from previous years where uh water uh will be presented separately in

2:09:42 August to um concurrently with electric. Also shown is the u for the board and public is a reminder of the rate setting process. Uh we are at the first step on this slide as you can see and then um the capital investment plan we're presenting tonight directly determines how much e webb needs u to collect from our customers. So um I just wanted to outline those steps. Next slide. Now this slide covers the um process and timeline um in more detail. Now the um CIP goal our um goals are the same. The board has seen in the past years with

2:10:28 one addition this year um managing financial constraints. Um this reflects the deferral and tradeoff content covered um in the memo and represents a direct effort to manage rate impacts to customers. Um bringing the rate trajectory into closer alignment with what the board had provided in terms of guidance at an earlier meeting. Um July is our first of several touch points um with an emphasis on transparency through a public process that culminates in board approval in December. All right. So this slide previews the core tension um that I think that you'll see in the rest of this presentation um in more detail. Now uh I think you know

2:11:15 for me you know in just kind of the discussions we were having u the struggle is real u or rather the capital needs are real. Um much of our electric infrastructure dates to the 1960s and 70s and is reaching end of life. uh with growing risk from extreme weather and climate change, uh wildfire resiliency is now a major design consideration for new and replacement infrastructure. And the bottom line is that costs are rising. Uh inflation accelerated sharply starting in the COVID years and has stayed elevated. um supply chain disruptions, tariffs, and tightk skilled labor uh markets are driving up construction and material costs. And uh

2:12:02 most of this is outside of EW Webb's control. Affordability pressure is growing. Um our core responsibility is to keep the power on and water flowing. But um couple that with customers consistently ranking affordability and reliability as their top priorities. uh there's an inherent tension uh between the two. So so what is it we can control? Uh rate design uh assistance programs, conservation efficiency, operational cost discipline, capital planning and internal policy. What we don't control are household incomes, um customer usage habits, supply chain and tariff um costs, inflation, and regional

2:12:47 energy market pricing. So, um, with all of these in play, we had to make some really tough choices and this plan reflects, I think, deliberate deferrals to manage rate impacts to our customers. So, um, with that, I I'll hand it over to Lisa, uh, Prince, our electric chief operating officer, for more detail on our capital plan. >> Thank you, John. Uh, good evening, commissioners and, um, attendees. I'll be sharing a little more detail about what's in our our financial plan. Uh but I wanted to start a bit by what is guiding the plan. So our financial plan is guided by three foundational elements. Our strategic plan, our financial policies and the board's existing rate guidance. The board has

2:13:34 consistency consistently emphasized two principles. Smoothing rate increases were practical and benchmarking rates against inflation. At the same time to bring home the po point that um uh general manager Haristen was saying uh there are some really important tensions that we need to recognize. Ub has multiple core values. Uh those core values don't always point in the same direction. We have priorities such as safety, reliability, affordability, environmental stewardship, and serving our community. All of which are essential. But there are times when advancing one objective requires trade-offs with another. This financial plan is intended to thoughtfully balance those competing priorities. Uh before I move on, did want to make one note that

2:14:20 the photo that you see in this slide is from the Dana substation rebuild that is nearing completion. This is one of those projects um that we are investing in for resiliency for future generations. One of the challenges we fla face as mentioned by John is that inflation although a useful benchmark for routine operating costs doesn't fully capture the investment needed to replace aging infrastructure and meet regulatory requirements. This chart illustrates that tension by comparing the cumulative e-web rate increases with inflation since 2016. As you can see, inflation has increased more rapidly than electric rates. We'll come to back to this later when we

2:15:05 discuss the proposed rate trajectory. This slide summarizes the assumptions behind the financial plan. On the left are our financial key assumptions and on the right are the major capital drivers identified by engineering operations and our strategic plan. Although nearly all of the financial across nearly all the financial assumptions, the common theme again as stated by John earlier is continued cost pressure from labor, materials, equipment, and contractor availability. Uh you'll also notice that reserve targets incrementally um increase over the planning horizon. That's intentional um an intentional approach to ensure that our financial resilience keeps pace

2:15:50 with the growing operational, environmental, and market risks facing the utility. This plan does include pre-unding for the Liber decommissioning effort consistent with the direction the board provided in 2023. It also includes another important assumption around customer load. We are projecting essentially flat base load throughout the planning period. That's because we expect continued conservation and energy efficiency gains to be largely offset um to largely offset underlying load growth. Now, it is important to note that this assumption does not capture the localized capacity needs associated with uh electrification. We'll discuss that distinction on the next slide because it's an important consideration for future infrastructure planning.

2:16:35 One additional footnote worth highlighting um relates to BPA power costs. The current assumption reflects the uncertainty surrounding BPA's rate case, which remains unresolved following the 2026 federal court ruling on Columbia River hydro power operations. Until there's greater certainty, which is expected later this fall, we've taken a conservative planning approach. The assumed 6.3% BPA bianual increase translate to translate to approximately a 2 and a half% e webb retail rate impact to our customers during those years. On the capital side, quick reminder. Both Carmen Smith and Liber Walterville are regulatorydriven investments that are not discretionary. Beyond those projects, the capital plan focuses on

2:17:21 replacing aging infrastructure while making targeted investments that improve reliability and system resilience. Because of sustained cost pressures, um staff is proposing to defer several capital projects to reduce pressure on customer rates and better align the plan with the board's guidance. Tonight, we are seeking the board's direction on whether this represents the right balance. The largest deferral is delaying six substation rebuilds and the underground cable replacement program that represent about $65 million in deferred investment. Now, there are trade-offs associated with it with those types of deferrals. Uh, the primary trade-off for the deferrals we're presenting this evening is reliability.

2:18:06 We project the average customer outage time, which is also known as safety, safe safety, will increase from about 55 minutes per year today to roughly 70 minutes per year by the end of the planning period. While that's a measurable increase, it does remain within regional utility benchmarks. We've also deferred uh electrification capacity projects, the Burlesen operations expansion, and renewal work at both the Stone Creek and International Paper Generating Facilities. In each of these cases, um staff will continue evaluating funding opportunities and closely monitor asset conditions so projects can be accelerated if risks increase. Overall, these recommendations are intended to moderate rate impacts while managing

2:18:51 operational risk through targeted mitigation measures. Shown here is an overview of the 10-year electric capital improvement plan. The plan includes approximately $626 million in investment with nearly 60% of that occurring in the first five years. that reflects the urgency of addressing aging infrastructure and meeting major regulatory commitments. Implementation of the Carmen Smith operated license is the largest individual project at about $130 million yet um to spend to complete those requirements. The plan in assumes approximately 2 and a half or excuse me 205 million in bond financing primarily in 2029 and 2032

2:19:37 with a balance being funded through rates. The graphic on the left shows the substations included in the proposed deferral strategy and their revised replacement sequence. On the right is the projected impact on reliability. That's the sadi that I was talking about earlier. And as I mentioned on that previous slide, based on our experience with substations that have exceeded their useful life, we estimate average customer outage time to increase by the end of the plan. That projection assumes approximately one significant outage per deferred substation each year with a 2-hour restoration time. Now, while reliability is expected to decline somewhat, again, it remains within the utility benchmark, and we will continue to monitor asset condition and adjust as

2:20:22 needed. And with that, I will hand it over to our assistant general manager and chief financial officer, Deborah Hart. >> Thank you, Lisa. Good evening, commissioners. [cough] >> So, behind me here is a graphic where the gold line Oh, thank you. The gold line on the graphic behind me is the forecasted rate trajectory based on the priorities that Lisa has just covered. The rate trajectory is a little bit bumpy with spikes in 28 through 31 and uh the board has previously given us guidance to smooth rates where possible.

2:21:07 And so with the savings noted on the gray line at the bottom, the trajectory could be smoothed to a consistent 3.5 through 2033 as shown then by the blue line. The 10-year cumulative, however, is very similar between those two rate trajectories. The required annual savings to achieve this smoothing ranges from 600,000 to 8.2 million uh depending on the year. And while management's not fully identified the savings, we do remain committed to do so. Leadership has already been working hard at identifying opportunities to ease the rate burden on our customers. uh resulting in the 3.5% forecasted

2:21:54 increase in 2027. Today, EWB's average bill for a single family electric heat electric heated residents sits roughly in the middle of our comparators. The forecasted increase of 3.5% would result in a $7 increase to the monthly bill. It is important though to note here that the coastal results are not final and so impacts to specific customer classes uh are yet to be determined. Since uh 2026, EW's customer care budget has nearly doubled and the MHI indicator

2:22:40 has stayed roughly flat at 3 and 12 to 4% of median household income throughout that same period. Uh bills have stayed proportionate to income even though both have risen. 6% is both Oregon and the federal standard for utility burdened households. and EW Webb's average customer does remain well within that threshold. Uh know though that EWB's indicator does reflect the combined water and electric while the 6% standard is specific to energy only. And so with that there is no uh formal action requested from the board this evening. Uh we are asking for for

2:23:26 direction though on our strategic p priorities assumptions in the capital plan. The direction from the board this evening then carries over into the budget process that John touched on at the beginning of the presentation uh and will lead us to develop the budget and bring that back to you in the fall. Uh so with that, President Brown, I'm going to hand it back to you. >> All right, I'll open the queue. Questions or comments? Sonia >> slide I just took this I thought that this was you know the median monthly income and it was our comparison to that but these are in the thousands

2:24:12 that's the that's the median household annual income as the census reflected it in each of those periods so going up over It's not actually the change in it's >> the percentage change. >> Okay. Okay. Great. >> Thank you. Um yeah, it's I mean main takeaway I think for me in this is that if I should do smoothing there's not a huge difference. Oh, thanks. Um the the main takeaway for me in this is that it seems like there's not a big difference between the two in terms of the the ultimate cost at the end even if we're smoothing it out.

2:24:57 >> It's about 1% over 10 years in the cumulative. So no, it is it is not a large difference. And so when we when we talked earlier about the costs that we lose when we have an outage, this was well well earlier in the evening. I mean this was an economic impact of a day of water outage, but I think we have a similar metric for electric outage, right? So we have kind of a rough estimate for how much economic impact we have when we have an increase in outage. I don't know if you have that off the clip here. >> I don't have it off the top of my head. And I'm sure we have we can get some of those figures. >> Okay. It's it's interesting to me because you know we do want to smooth it

2:25:42 out and I also see that we just increased about 65 million and now we're trying to remove 65 million um overall. So I it it is good to smooth but it doesn't seem like it maybe impacts on the whole but maybe it does offset some of the previous change that we made. And I know that it all impacts our customers differently depending on how much water they use and how much electricity they use and you know the mix of their household. Um but I do appreciate you all looking at these different scenarios and it gives me a lot of things to consider as we go forward. I know that we don't have any um any decision to make this evening. So, I'll

2:26:28 think carefully about it and I appreciate the time you've put in. >> Vinnie, >> yes. My main comments are um not specifically directed towards you, but towards the board at in general. So on the deferral and tradeoff slide where you show that we're deferring or delaying um work on the substations, all these different things, they're all eventually going to have a cost because we're going to have to do them. And the board just voted to go with the water treatment plant with an option that costs $50 million or more than what was recommended. So we we opted to spend more money, but here

2:27:15 we're opting to spend less money. So uh and that's on us, not on you. But I just see some inconsistencies there with priorities because the same arguments kind of are true that if we delay these things that it's going to end up costing us more money than if we were to do it now. So really nothing for you. I'm just kind of thinking out loud, but there is some inconsistency there. That's all. >> Thank you, President. I'm still considering my my thoughts here. I haven't >> Thank you. >> Thanks. Um, couple of questions. Um, you

2:28:02 talked about uh deferring Stone Creek and IP power plant. are do we have P part partners at Stone Creek that that they're going to say, "Hey, we want to do it." And >> we don't. We're the um we're the sole owner of the Stone Creek Hydro Plant. >> And then on the other on the other slide, it showed uh IP as being a green one on track and this one shows it as being deferred. >> So there's multiple things. Um one the major project we've defer deferred at international paper is um a major rebuild or of the generating units. So the turbine generator itself um the graphic that you saw on the other slide is substations. >> Okay, great. So my questions go to the

2:28:50 it's the last it's it's not on there. It's in here. It's kind of on there. your last slide that had the uh the Excel chart up there. Um but I'm looking at a more detailed one and I have some questions on that. So um if you look the first questions I have is in your savings. Um 3.9 million, 4.5 million, 8.2 million, 3.8 million, and 7.6 million. You say that's the that's how we get to 3 and a half% rate trajectory. But you haven't identified those savings or are those savings the $65 million or is it on top of that?

2:29:37 >> The the savings in gray would be additional savings that we would need to identify >> on top of that. Okay. >> So those rate trajectories are like, "Okay, guys, go sharpen your pencils because in 2031 I need $8.2 million in savings from Lisa's department. Not entirely all electric operations but yes across the electric utility we would need to find that savings to hit that rate target. >> Okay. Then the next question that I have uh goes to the regulatory mitigation fund. Can you please explain that more to me? I understand that that regulatory uh challenges are out there. We see it all the time, especially with our with

2:30:23 our uh generation side. Talk to me about why you need it to be at $25 million. What that 20 five how we would spend that $25 million and just just talk to me about this because it's a fund right now that is just getting started. It's got $2 million and you're you're wanting to ramp it up to $25 million. So, please give me more information about the regulatory mitigation fund, how we're funding it. Well, I I see how we're funding it, how it would be used, and when it would be used. >> So, the regulatory mitigation fund was established acknowledging that uh we continue to see an increase in in costs

2:31:09 and regulation particularly around our hydro projects. uh there are not specific requirements on how the board might choose to use that. So should we experience additional costs at Karman for example, that would be a place that we could turn to uh as a result of regulatory issues. That would be a fund that we could turn to to help finance uh those increased costs. >> Okay. And and lastly, have we ever thought about a syncing fund for some of our assets for decommissioning some of these things? I mean, we we're buying assets and we see how much it costs to decommission them.

2:31:54 Has there ever been I mean, could that also be part of a a syncing fund? it could ultimately be rolled into a sinking fund and that is a part of the conversation now after coming through the Liberg discussion and working on preunding that uh as Carmen uh fully comes into service. We'll be turning our attention to uh to a conversation about a syncing fund. >> Great. Thank you. >> Yeah, I would just add that I mean that's common practice. Um, you know, I I'm familiar with having a decommissioning fund for nuclear plants where you fund and then if you decide to relic, uh, you can, you know, throttle

2:32:40 back a little bit on how much you actually contribute, but having those funds and anchor is prudent planning. >> Yeah, I'll jump in and then I'll go to Tim. Um, just a couple questions on page four, the capital escalation 5% for 2027. What is it? Can you tell me what capital escalation it includes? >> That's a general inflation factor on the capital plan. >> Um, so I'm I'm look at what we just had 80% inflation for our water justification in four years. And so why is this number so conservative? We we've just experienced it and I I did the math and so it's 80% over four

2:33:25 years. So why is this number so low on inflation cost CPI you know inflation? >> I I would the one thing I would say is that that 80% inflation on the water plant treatment plant that increase in cost is a difference in size and functionality of that plant too. from >> it's a completely different >> it was I thought it was the same plant that we that the cost just went from 70 to 160 and uh and uh we had to change the the size in that at least that's what I got from the >> maybe I misread it but anyhow but it was significant it was whole lot more than this I'm just wondering if these inflation numbers are reflective of what we've been experiencing so I'm just just

2:34:10 putting that out there you're not looking for direction then and then the other thing our rate trajectory to three and a half% that's exclusive of Bonavville their bumps correct that's just our costs so whatever Bonavville bumps us in the fall every year is going to be added to that three and a half% >> that does include Bonavville an assumption assumption okay good though that's great and then um do have we melded in in our costs anything about Walterville or the lawsuit >> not not currently we have some well Lisa could speak to what we actually have in there for Walterville. Uh >> yeah, we have some um it's not in the capital plan because it's not capital work at this point, but we we do have in

2:34:55 our our budget >> Walterville strategic evaluation which is kicking off next year. The results of that will inform the longer term decision around Walterville. That's for the long-term decision. What we do have in the capital plan is around a repair of the Waltville floor bay liner that is included. Now again we have some approvals still that we need to go through and if there are additional regulatory requirements related to DM safety uh you know specifically around seismic upgrades then we will go back and we'll revisit the business case around uh whether it warrants uh the investment at this point in time to operate until the license expires in 2040

2:35:40 >> and the the sad is increasing 27%. What about the safety? Um >> I would have to turn to Tyler and see if Tyler knows anything about safety. >> Yeah, the safety is the frequency. I didn't model that as much because you know you get one substation outage. It's not a lot of frequency at outages. So the the bigger impact is the duration though everybody suffers. >> So we're not anticipating an a number more outages. It's just longer outages. >> No, we we basically earn one one major substation. you know, a substation is feeding about 3,000 people is the average. So, there are very few outages, but they're very widely impactable to a lot of people. >> Okay. So, that's that statistic is just the substation. Okay. All right. Thank you. All right. That's all I have. Tim.

2:36:27 >> Yeah. Thank you, President. Um I the majority of my questions have been asked or have been answered already in our board packet. So, um, and I was really, uh, primarily looking for, um, uh, the utility rate trajectory, which, um, was asked and answered. And so, I really do appreciate this work. I, I think my only question to you is, is there anything we haven't asked that you hope that we did? >> Yeah. Um, well, it's not a question. And I, you know, I really would be seeking um, you know, your thoughts on the deferrals, uh, you know, and and the trade-offs that those come that those come with. If we have attempted to create a plan that balances uh, those deferrals, a large u portion of those

2:37:13 deferrals are on the substation side. Uh is that sound reasonable to you to meet the um direction that the board has previously provided to stay, you know, within uh this essentially 3 and a half% rate increase. >> Good. Go ahead, Mindy. >> Thank you. >> Yeah. Again, I feel conflicted because we just voted for the water treatment plant to um be bigger than what was recommended. And um some of the arguments that we came up with had to do with resiliency. And so when I think about the tradeoffs that we're making here, that really affects resiliency. I mean, um,

2:37:59 and then my question is then what will the actual costs of this be? Because we're just deferring these things. We're not not doing them. So, when do we do them and how much extra cost will there end up being? Because we're going to continue to have these these rate pressures. It's not like, you know, after we we smooth it out and then everything's going to be great and we can go ahead and have, you know, start checking off our wish list. So, at some point, we're going to have to pay for it. So, what what does this actually look like? How will this work get done? >> Yeah. Yeah. I I I think that that's a a real valid point. I think it would be nice when you come back if you could give us the rate trajectory with this

2:38:45 with the substation builds in there. Would it be would it go from three and a half percent to three and three/4ers percent? Would it go to 3 and a.5% to 4%. Knowing those numbers and then also knowing the expected cost to do it in five years, right? What's that $65 million going to cost us in five years? And what would what would the rate impact be in five years? Because in five years, Walterville's going to hit. and and so um again knowing the knowing those numbers would help me make an informed decision. >> Yeah, thank you. That's that's helpful. And I Deborah can um please correct me

2:39:30 if I'm wrong, but I believe you know the deferrals as long as they still hit within the 10 years of the plan, they've been escalated. >> That's correct. >> Yeah. So unless we see um unanticipated rise in costs, which we have seen in the past, that doesn't necessarily mean we'll see it in the future, but we have seen it in the past. So your concern is warranted. Uh there's an there's an escalation already included in >> So So we're not not doing these, we're just pushing them off and they are in the 10-year 10-year plan. >> Not all of them are within the 10-year plan. And I'm looking at Tyler, too. Six are within the 10-year plan. Please go ahead, Tyler. Yeah, there's another I'd have to look at my notes, but there's another five, I think, that fell off the end. It's kind of just like a conveyor

2:40:15 belt and they fall off the end and then get put back on when we move next year. You'll see one of them put on the tenure. >> Okay. >> Yeah. >> The the unfunded ones. Sorry. >> Yeah. I was just going to say um you know, the intent is not to um u you know, just kind of put some of these off for forever or not do them. um it's really just trying to push it out a little further to provide the u you know kind of the rate u impact that we're looking for under the guidance that you guys provided. The other thing too in terms of the deferrals and the trade-offs u you know I will say coming in to the role and and then um having the challenge of trying to pare down the budget couple of things one the guidance

2:41:00 I gave was um we didn't want I mean part of the getting the work done is being able to retain the intellectual capital of the people that you have in the organization and so that was a priority um we did not want to address these challenges through um you know letting people go. We wanted to retain them um so we could get this work done because we know we're eventually going to get to it. Uh but what we also the challenge that um you know I asked Deborah and the team to take on was to make sure that we put something within the range that you had asked for that three and a half%. And so this is the result. There are some trade-offs, but they aren't things that won't be accomplished. They're just pushed out a little bit further.

2:41:47 >> Yeah. And and I think I'm comfortable with that. Um especially considering the mitigation things that you put in there like buying more transformers and and having having the spare parts so that when it does break, instead of it being a 4hour downtime, you've got the part in the yard and it's a two-hour downtime. So, I appreciate that that type of mitigation. >> Yeah. And I just wanted to make one more note um if it wasn't clear in the presentation you know we have had to make some challenging decisions because primarily because of the regulatory drivers on the generation side. So Garmin Smith and Leeberg and Walterville uh also fully funded by electric rates and it's you know unfortunately then we need to make decisions between

2:42:33 generation transmission and distribution when we're talking about infrastructure and uh it's been challenging uh we have prioritized meeting our regulatory commitments but did just want to note that that's that's a driver uh for some of the constraints that we're seeing. Um, if I may, I I have a question regarding the uh delayed start of underground cable replacement program. I I misunderstood that initially because I was hoping that, you know, the undergrounding in the South Hills where underground cables weren't required when all was built, that's our highest wildfire risk area. And so, we're not we're delaying just replacing the one because that's in the flatland out where I live and it's 20 years old and it's all starting to go out. You know, I've had three of them in my neighborhood in the last year and a half, and it seems

2:43:20 like it's much more expensive to replace underground cables because of the having to pull the new line and figure out, you know, it just seems like it's something overhead is easy, but underground is rather and by delaying that are we inflating that cost? I mean, pennywise and pound fluish. >> Could you please? Yeah, it like anything in there, we push the cost out a little bit for that program to start up where it kind of ramps into doing our targets about 30,000 feet a year. And you're correct, it's it's replacing old stuff, not undergrounding new things. Uh the the longer we go, it's kind of a, you know, peaks up as far as the failures go. So, you're right. If you get behind, it'll outpace you. So, the goal is to get that started up. It involves getting

2:44:05 more equipment and people that also got pushed out in the plan uh to be able to achieve that. But it's about three years it got pushed out. Three years. >> Okay. I'm just thinking the logistics about we push that out, we're going to end up in the same situation that we're on now. We have all the substations are aging at the same time. It's like replacing all your light bulbs in the house at the same time. They all go out at the same time. The same thing with the undergrounding. And uh and it's I don't know. I' I'd like you to respond to what John asked about the rate differential if we don't do this where we're going to be um when we come back. Sonia, >> I think that I'm supportive of the delay in the deferral. Um but I am

2:44:52 curious if for example we come into a recession because you know maybe we can't survive unending increases forever and it causes other changes because the federal government cut millions and millions of dollars and that is taking a little bit of time but it is going to impact our economy if some of those costs come down and there is an opportunity to speed up some of this work. How quickly could we pivot to kind of claw that back and say, "Hey, let's let's actually do some of these when it's prudent, when the costs are not as high."

2:45:38 >> Yeah. On the substation side, I think that it's there's a lot more planning involved. So, it's two years uh to to be able to to um execute a project on a project like that after we get the go-ahad to do so. >> Anybody else have any questions or direction comments? >> Got what you need from us? >> Deborah, I don't >> not quite. Uh so uh I did I heard and ask to add back some of the capital that we've taken out of the plan. Maybe that's over a 10-year time. What we do need uh tonight to go forward to do our

2:46:25 work for fall is to understand where you all are at with the 3.5% overall and the work that we're talking about doing immediately next year. group. John, >> after discussion, I think I'm okay with with the plan that you put forward. Um, and the and and the pushing the 65 million back for for me when I asked that, I I kind of thought those were dropping off the table, not that they were just out of the 10-year plan. So, with them being in the 10-year plan, I think I'm okay with with the plan pushed forward. Sonia,

2:47:10 >> yeah, I'm supportive of the delay. Thank you. >> Thank you, Tim. >> I'm supportive of the delay. Thank you, >> Indy. >> Same. I'm supportive. >> Unanimous. Now, do you have what you need from us? >> Yes, I do. Thank you. >> Anything else, John? Yeah, I was just going to I want to recognize the team um you know for all the hard work they've done on this. Like I said, coming in and having this presented, this challenge presented um our executive team did a great job working with our managers and in figuring out a path forward on just want to recognize their efforts. >> Okay. Thank you. The next agenda item is going to be the future board agendas.

2:47:55 >> All right, Mr. President. Uh so um items of note for the future um agenda items. I think further discussion regarding the second treatment plant. Um we will um nail down a meeting to return um the rate forecast based on tonight's decision. We're going to aim for August, but I'll sit down with our finance team and see what we can um put together by then. But I think it'd be important to get in front of you the impacts of um this decision to um consider. Uh we also um will be um returning next month with the water utility annual capital improvement plan assumptions and priorities uh for 2027. So just um want

2:48:42 to make sure folks are looking forward to that. And then we will also be laying out our approach to developing the new um annual strategic plan um in September. So um just want to be mindful of that. I also was hearing there could be some potential um conflicts for board members in September. So we may want to sit down and talk about that a little bit. about a um pulled the group prior to the meeting just informally and uh there would be a desire to move the meeting from the 1st to the 8th. >> Okay. If everybody can accommodate it if if it doesn't disrupt staff. I know we have an executive session planned prior to the meeting, but I think that would probably be by Zoom. I don't think we're

2:49:27 going to >> fly them down here just for conversation >> in the ETH. Is that the >> Well, the ETH is is I think a misprint. It should be the first agenda. >> Yeah. But you want to move it to the ETH. >> Move it to the ETH. >> Okay. >> And and if that's okay, that will help a couple of our board members um one attend and the other one not have to come back from vacation early. So if that's okay with staff and you, we would like as a board post that. >> Yeah. No, that that's fine on my end. Um so let's >> Could you confirm that with >> Yeah, we'll confirm that with you. >> Yeah. >> Okay. Thank you very much. because I notice we got quite a bit of time remaining on both August and September. Um, [clears throat]

2:50:12 >> and then I think um I think that might be it. >> Yes. >> So, we still have a tenative placeholder for a work session. >> Work session. Yeah. >> I'm assuming we're not having one. >> Well, I think we have one for July. Um, that's on the 15th that we won't need. And so um let's see Ann when is the um work session for August? What date is that? >> The 18th. Yeah. So I don't think we need one for July. Um August I think we might want to wait until after the August meeting to

2:50:57 see if we want to take advantage of that date. All right. Any other uh any anything else for future board agendas? If not, then I'll just go to the next agenda item of board wrap-up. Um Bendy, anything for the good of the order? >> Nope. >> I have a few things I'm hoping to follow up on. Um the uh we had a response uh from a question last meeting about bill due dates and being able to change those. And the response that we got from staff was not as clear as I was hoping it could be. Um, it just explained that we couldn't do it, but it did not go into detail as to why we were not able to offer bill changing to uh for

2:51:42 customers to be able to change. Um, and I think that from my constituents, that's one of the things that I hear is one of the big challenges they have here at EW is not being able to change their their build dates. I have a high propensity of renters in my community that they move in. Part of the standard contract is they can't, you know, they are required to take over ownership of the utilities the first day they move in. So, their bill due date is just whenever they happen to have moved in. Um, and it's just permanently stuck like that. So, I'm hoping that that's a conversation we can have at the board level or that there or that there's more information as to like what are the complexity and challenges to not allowing that? why can't we? Um uh so that's one thing that I'm hoping to follow up on. The other is a

2:52:29 conversation that's been coming both at the state and local level around data centers. Um we have three here locally and I'm wondering what we're doing as utility to make sure that those high energy costs are not being passed on to consumers. Um, I'm not hoping for anything from staff tonight about that, but um I know that uh Portland General Electric uh seven hours ago uh just issued a lot of uh increased fees to these data centers for their high energy usage and I'm uh wondering if that's a path that's available to us as well. >> Okay. Well, I mean, keep keeping with protocol, I think before we put anything on the agenda, we got to >> run it around and see if we have three heads to make sure that just because if five of us had 10 things, we'd never

2:53:15 we'd never get to what on the agenda. So, yeah. First about the uh the billing about variable dates of billing. Um, how do people feel about having that is an agenda item? Sonia. >> Well, I raised the issue because I I also had a constituent that um or I had a constituent that reached out to me about the billing. The only um part for me that was um it it seemed like it was tied to a region and that we did the billing based on when meter readers could go and do the reading. So, it was regional. I mean, to my point, I would I to Tim's point, I would like to know a little bit more if that is kind of an antiquated um reflection of when meter readers were

2:54:02 out and and had to be in a particular area. So, they had to read those bills for this region because they were due for that month. And now we're primarily on um you know, smart meters and such. So, it doesn't seem like we have that same limitation. So, I am curious about that one. So would would a backgrounder from staff be adequate to and then if we still have a bliton of questions and and things? I mean I would that >> I don't think it needs to be an agenda item person. >> Okay. So first if that's okay and if is that okay with you Mindy and John background from staff. Okay, we'll just get a background from staff on that particular title and then the your second topic about um data centers and you know the same thing

2:54:47 would a backgrounder from staff be you know identify the three or you may want to identify who that is public. I'm I'm interested in a a backgrounder on this >> a background because we have major customer type thing. We have consumers that use a lot more than the data centers here and and so if we can give us a background on that too. I think if that will appease you and and get us to where we need to go, we can do that and not make an agenda item. John. Yeah, I I guess I Yeah, that would be great because I mean I think that any large large new load comes in at a different rate. I mean that that's something that would be brought out in the backgrounder is that anything above 10 megawatts the Bonavville uh pricing goes they don't

2:55:33 get it at our tier one pricings. It would be at market rate pricings and those type things. So that would be explained in the in the backgrounder. So yeah, I I agree. I I don't think that if we brought any new large load customers onto our grid that they should be paying our tier one prices. They should be paying market rate prices is what I would hope and I think that's what is in our BPA contract. >> And I I would want to add when when we go into that data, we do have a history. I remember with the University of Oregon when they put in their new science center on Franklin Boulevard, we had a contractual issue with them about how much they were going to pay or whether or not they were going to fire up their generator and generate their own. And so, um, I'd like that to be included in the information, too, because I think we gave them a pretty good break on that,

2:56:19 too. They're getting pretty good deal on that. So, just so we're playing fair with everybody. Yeah. And other board wrapup items. John. >> Um, no, I I just would like to thank and commend the board on the on the discussion and deliberations that we had today. It really shows the um how functional this board is when coming up to these major decisions. It's it's really really tough when you when you're asked to spend $390 million and and do consent calendar things for tens of millions of dollars. I really appreciate uh my colleagues here uh for their willingness to dig into the dig

2:57:05 into the conversations and uh make thought thoughtful decisions. So I appreciate you all. Thank you. >> Any other things? Sonia, you good? Mindy, you good? Yeah.