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HomeMy WebLinkAboutCC Minutes - 06/09/99 WS EUGENE WATER & ELECTRIC BOARD EUGENE CITY COUNCIL JOINT WORK SESSION EWEB TRAINING ROOM JUNE 9, 1999 6:00 P.M. EWEB Board Members present: Susie Smith, President; Mike Dyer, Vice President, Sandra Bishop, Dorothy Anderson, and Peter Bartel, Commissioners. Eugene City Council Members present: Jim Torrey, Mayor; Scott Meisner, President, Nancy Nathanson, Vice President, Pat Farr, David Kelly, Bobby Lee, Gary Pap~, Gary Rayor, and Betty Taylor, Councilors. EWEB Staff present: Randy Berggren, General Manager; Ken Beeson, Deborrah Bewer, Tom Buckhouse, Marty Douglass, Dick Helgeson, Garry Kunkel, Dale Kessinger, Roseanna McArthur, John Mitchell, Debra Wright, and Krista Hince of the EWEB staff. City of Eugene Staff present: Jim Johnson, City Manager; Pam Berrian, Lew Bowers, Jan Childs, Jim Croteau, Phil Farmer, Les Lyle, Paul Weiler, Margaret Wilkenfeld, and Warren Wong. Members of the public were also in attendance. President Smith called the Work Session of the Eugene Water & Electric Board (EWEB) to order at 6:05 p.m. Mayor Torrey called the Work Session of the Eugene City Council to order at 6:05 p.m. OPENING COMMENTS President Smith welcomed members of the City Council and City Staff to the EWEB facility and expressed her desired outcomes for the Work Session, as follows: · That Commissioners and Councilors would learn more about the mission and challenges each faced; · That issues of concern would be identified which could influence budget planning processes; · That additional areas of cooperation would be identified. President Smith invited Commissioners to introduce themselves, identifying the City Council wards which they served. Mayor Torrey expressed appreciation for the opportunity offered by the Work Session to discuss mutual issues and concerns. He said the meeting was one of a series the City Council was holding with governmental partners. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 2 Mayor Torrey invited Councilors to introduce themselves, identifying the wards which they served. Mayor Torrey distributed copies of a document entitled "1999-2000 Vision and Goals Statements." He said it contained approved vision and broad goal statements of the council. President Smith invited members of the EWEB and City staffs to introduce themselves. INFORMATION SHARE President Smith referred to information about EWEB's background, legal authority, current operation, goals, and key issues distributed with the agenda of the meeting. She reviewed Board Operating Principles - Business Success, Community Leadership, and Sustainability. Mayor Torrey encouraged study of the Council Vision, Goal Statements, and proposed action priorities distributed earlier. YEAR 2000 ISSUES EWEB Risk Manager Debra Wright referred to information regarding the work of the Utility's Year 2000 project team distributed with the agenda of the meeting. She reviewed basic tasks which had been identified to meet the goal that customers experience minimal disruptions in electric, water, and steam services as a result of system failures caused by computer technology related to the change to a new millennium. Ms. Wright said evaluation and correction of critical equipment and computer systems Year 2000 problems which could impact EWEB's ability to deliver electricity, water, and steam would be completed by June 30. She said the one exception was replacement of the Energy Management and Control/Supervisory Control and Data Acquisition (SCADA) system, which would be delayed by vendor testing until September 15. She described assurances given by the Bonneville Power Administration (BPA) and U.S. Army Corps of Engineers that electric generation and transmission systems were ready for Year 2000 problems. She explained that an advantage that EWEB had was that many elements of its water system pre-dated embedded micro-processor technology. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 3 Ms. Wright stated that current EWEB Year 2000 compliance priorities were to complete critical equipment projects; to finalize product and corporate contingency planning; to develop definitive staffing plans for the transition period; to test systems independently and in cooperation with regional partners; and to complete critical business system updates and installations. City of Eugene Communications Director Phil Weiler referred to information regarding the City's Year 2000 remediation work distributed with the agenda of the meeting. He reviewed efforts to identify objects affected by the problem, the work of a Year 2000 Management Team, development of contingency planning, updating of the City's Emergency Plan, Interagency Coordination, and Public Outreach. Mr. Weiler said that current City Year 2000 compliance efforts were directed toward completing contingency plans for all services, developing backup communication plans, finalizing staffing plans, and completing the outfitting of the new City Emergency Operations Center at the Sheldon Fire Station. Councilor Nathanson asked if the scheduled time for beginning operation of the City's Emergency Operations Center on December 31 was early enough. She said both the City and Utility were to be complimented for good Year 2000 related outreach programs, but asked if additional efforts would be made in December to help citizens become more aware of appropriate preparations for potential problems related to the end of the millennium. She asked for a description of Year 2000 testing to be done by the City and EWEB. Mr. Weiler stated that the City's Emergency Operations Center would be capable of opening earlier than anticipated, if worldwide events warranted doing so. He said the City hoped that a special December Year 2000 preparedness media campaign would not be necessary because earlier efforts would have fully prepared citizens. He described the Community Emergency Preparedness Training program carried out by the City. Ms. Wright said EWEB would carefully monitor Year 2000 difficulties encountered by other utilities throughout the world to determine if additional readiness measures needed to be prepared. She described Year 2000 "table top" contingency testing exercises of EWEB and the City. She said EWEB officials had confidence that all local and regional utility-related Year 2000 compliance concerns were being met. She described the unique north-south orientation of the western region power grid, and stated that hydroelectric power generation was the least likely to be affected by Year 2000 difficulties. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 4 Councilor Kelly asked what the City and EWEB were doing to assist the development of neighborhood Year 2000 planning. He asked if the EWEB SCADA system was being adequately tested for Year 2000 readiness. He asked how long would be required for a "manual work around" of a BPA system problem. Mr. Weiler said the City had embarked on a "Community Preparedness - One Household at a Time" program. He reported that the City's Neighborhood Leaders Council had formed a Year 2000 Subcommittee, but that most preparedness programs were involving groups outside its formal associations. Ms. Wright said that the Energy Management and Control System (EMCS) being purchased by EWEB was an upgrade of the one currently in use and had Year 2000 testing built into its development. She said the BPA would not likely be able to estimate a "manual work around" time for problems it might encounter because it had attempted to anticipate all potential Year 2000 difficulties. She said the purpose of the next series of regional tests was to discover if there were any unanticipated problems. Councilor Lee asked what was the most significant Year 2000-related concern faced by EWEB and the City. Commissioner Bishop replied that her biggest concern was public perception of the problem which was not based on reality and an ensuing panic. She said her biggest personal concern was that water service might be interrupted. EWEB Water Division Director Dick Helgeson stated that the EWEB water system was relatively "low-tech" and faced few Year 2000 compatibility issues. He said preparations in his division included devising plans for emergency power generation at the filtration plant and pumping stations. He said preparations were also being made to supply water and power to other non-EWEB critical service areas throughout the City. Mr. Weiler said he believed that if electrical power was not interrupted, all other perceived or real Year 2000-related difficulties would be manageable. Ms. Wright said weather factors might be a complicating factor in Year 2000 difficulties encountered in Eugene. She said system-wide utility failure was unlikely. Councilor Lee said he believed elected officials had an important role to play in dealing with the "emotional factors" of Year 2000 issues. He said he hoped both the City Council and EWEB Board of Commissioners would do all that could be done to provide assurance to citizens. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 5 Councilor Farr said he was concerned that preparations be made for potential Year 2000- related activities of anarchist individuals identified as being active in Eugene in a recent Wall Street Journal article. WATER SUPPLY PLAN Mr. Helgeson provided an overview of the EWEB water delivery system - McKenzie River source, Hayden Bridge filtration plan, transmission system, customer growth trends, and daily demand profile. Mr. Helgeson described the purpose and process followed to develop the EWEB Water Supply Plan adopted by the Board of Commissioners in January 1999. He said the plan included the following elements: · Continued reliance on the McKenzie River as the primary water source for Eugene. · Exploration of the use of groundwater as a backup supply source. · Increasing emphasis on water conservation programs. · Construction of new transmission and reservoir capacity upgrades. · Protection and enhancement of water source quality. · Maintaining future source options and seeking regional partnerships. Mr. Helgeson said Water Supply Plan projects were estimated to cost between $35 and $50 million. He reported that a financial strategy to pay for the improvements was being developed and that it was possible EWEB would request the City Council to authorize bonded debt as a funding tool. Mayor Torrey asked for an explanation of the impact of the water requirements of the Hyundai semiconductor manufacturing plant on the EWEB system. Mr. Helgeson replied that Hyundai currently consumed water at a rate of 46 million gallons per year - four percent of the EWEB production and one-half the originally projected estimate for Phase One of its plant development. He said the company's peak demands were two million gallons per day, approximately one and one-half percent of EWEB daily production. He said that Hyundai water use accelerated the need for expansion of the water system by two years. Commissioner Bishop stated that water service to the Hyundai plant was unique in that it was provided through a contractual arrangement and included the full cost of providing the services. Councilor Kelly stated that he had recently learned that he lived in an area in which water pressure did not meet fire suppression standards. He expressed appreciation for the work of EWEB staff to rectify the situation. He asked if Commissioners were aware of the situation. Commissioner Bishop said the Board was well informed of such problems. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 6 Mr. Helgeson stated that EWEB had been working on the situation referred to by Councilor Kelly for some time and that construction was planned for the current year to correct it. He pointed out that fire suppression pressure standards had changed over the years and that high demand created by new development in the extremities of the water system had created a limited number of such problems. Councilor Pap~ asked if EWEB had made studies of the potential effects of Endangered Species Act listings on the McKenzie River. Mr. Helgeson replied that EWEB currently took one to four percent of the McKenzie River flow and that projected Endangered Species Act listings would not likely affect areas of the river near EWEB's water intakes. He said there was concern about the effects of the intakes on fish migration and that the concern was one reason the viability of a groundwater backup source was being investigated. He said there was concern about the impact of Endangered Species Act listings on EWEB hydroelectric generating dams. Councilor Farr stated that he would appreciate receiving details of the EWEB Water Service Development Charge (SCD) fund as it related to capital investment in projects of the Water Supply Plan. Mr. Helgeson said he would supply the information to Councilors. Councilor Taylor asked for additional details regarding the cost of supplying water paid by the Hyundai plant. Mr. Helgeson explained that the Hyundai contract included payment for its full share of costs incurred in supplying its water, and that SDCs for future system development were also included. Councilor Taylor asked for information about construction of a pumping plant in her ward. Mr. Helgeson said he would investigate to determine if there were erosion or other permit violations in the project. He explained that extensive noise abatement properties were built into all pumping stations and that its use would be intermittent. Councilor Rayor asked if large water users received reduced rates. Mr. Helgeson said that "Declining Block" water rates were being phased out and that all rates would be uniform within two years. He explained that large users paid less for water services because they normally had only one meter charge, as opposed to a number of such charges for the same volume of water delivered to various locations. Councilor Nathanson said she believed the discussion illustrated that there were a number of issues for which consideration would prove mutually beneficial to the Board and Council. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 7 TELECOMMUNICATIONS PROJECT Telecommunications Manager Ken Beeson reviewed the vision for EWEB's Telecommunications Project - develop a publically owned and managed broadband high-speed fiber optic telecommunications system throughout Eugene to provide for utility business and operating needs, with capacity for lease by public entities and other private content/service providers. Mr. Beeson explained that Phase I ("Core System") of the project would install approximately 60 miles of 96 fiber cable linking EWEB substations, headquarters and interested agencies. He described the potential of leasing excess "dark cable," and a pilot residential project. He said the cost of the phase was estimated at $7.5 million and that bonding authority of $15 million was in place. He said installation of fiber cable and electronic components of the phase was scheduled for completion by January 2000. Mr. Beeson said Phase II ("Build Out") of the project would begin when the Core System was in place and generated sufficient revenue to cover its costs. He said the phase would create the potential for universal fiber optic service to Eugene residents. He said the cost of the phase was estimated at $70 million. Councilor Farr said he would like to be convinced that the EWEB Telecommunications Project did not constitute unfair competition with private industry providing the same services. Mr. Beeson replied that the EWEB project would provide fiber optic capacity for use by private industry and that it would likely increase services available to residents of Eugene. Councilor Kelly complimented the Board on its forward thinking regarding the Telecommunications Project. He said he believed movement of data would become as significant in the future as transmission of water and electric power. Councilor Nathanson said that she served on the National League of Cities Information and Technology Steering Committee which regularly dealt with issues related to the Telecommunications Project. She stated that the terms of the City-EWEB contract related to the project limited EWEB to development of infrastructure and did not allow it to provide content services. She said she thought of the project as similar to the highway system owned by the public but utilized by private industry. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 8 Councilor Pap~ asked ifEWEB had the authority to proceed with the project when the City Charter limited its activities to generating, collecting, and distributing physical energy. Mr. Beeson replied that creation of excess fiber optic capacity was permitted in the Memorandum of Understanding between EWEB and the City of Eugene enabling creation of the Telecommunications Project. He said the memorandum delegated appropriate authority to the EWEB Board of Commissioners. Commissioner Bishop said she had originally shared the reservations about the Telecommunications Project expressed by Councilor Pap~. She said she had become convinced of the appropriateness of EWEB entering the project when the savings it would generate for rate payers became clear. She suggested it was possible to interpret the City Charter reference to "energy services" to include a fiber optic cable system. Mayor Torrey left the meeting at 7:50 p.m. He reminded Councilors of the established operating principle that no Wednesday evening meeting would last more than two hours. Councilor Nathanson moved, seconded by Councilor Kelly, that the meeting of the Eugene City Council be extended until 8:30 p.m. The motion was adopted, 7:1, with Council Taylor voting opposed. GROWTH MANAGEMENT POLICIES City of Eugene Metropolitan and Community Planning Manager Jim Croteau described the citizen involvement process in a two and one-half year study of managing growth in Eugene. He said the purpose of the study was to review the effects of growth management efforts; analyze current trends and issues; establish community priorities; and recommend actions to address the trends, issues, and priorities. He distributed copies of a document entitled "Eugene Growth Management Study - Adopted Policies" and referred to the 19 growth management policies adopted by the City Council contained in it. Mr. Croteau described City projects undertaken to implement Growth Management Policies, as follows: · Land Use Code Update project · Park and Open Space acquisition · Revitalization of Downtown area · Update of SDC policies · EWEB Water Supply Plan Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 9 Councilor Kelly requested information regarding the current City SDC program and contemplated change proposals. Mr. Croteau said he would supply the information to Councilors and Commissioners. Commissioner Bishop suggested that there were trade-offs in the development of new provisions for the Land Use Code. She said an example of such trade-offs was that increasing residential density would likely reduce opportunities for solar energy use. Councilor Kelly asked how smaller lot sizes could affect solar energy use. President Smith replied that smaller lot sizes would limit the ability of developers to orient buildings to take advantage of the 10-20 percent reduction in energy costs advantageous orientations provided. Mr. Croteau stated that the Eugene Planning Commission was currently studying the issue of lot size and energy conservation and that he would provide information regarding it to Councilors and Commissioners. Commissioner Bishop encouraged City staff to call upon the expertise of EWEB staff to quantify costs of development. Councilor Rayor suggested that Growth Management Policy concerns about "connectivity" were mutually shared by EWEB and the City. SURROUNDING AREA REDEVELOPMENT City of Eugene Planning Development Division Manager Lew Bowers described the work of the City's North End Scoping Group. He said its report would be presented to the City Council in July. Mr. Bowers said the impact of a new Federal Courthouse and renovation of the train station were central factors in its discussions. He noted other themes in its deliberations, as follows: Growth Management · Downtown Revitalization · Enhancement of Public Services · Street Level Vitality · Connectivity Issues · Connections with Spencer Butte and the Willamette River · Lane Transit District Station and Downtown Shuttle Bus Service · Encouraging Structure Parking Replacement of Surface Parking Lots Mr. Bowers discussed developments related to the former Agripac facilities which might provide opportunities to revisit "Return to the River" ideas recommended in a South Bank Study Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 10 previously completed by the City. He said it could involve a new master plan for the riverbank area bordering on the EWEB office building. Commissioner Anderson asked if the North End Scoping Group had considered any of the "Back to the River" ideas. Mr. Bowers replied that the concern of the group had been more broad, but that it had discussed improving river visual and connection issues which were related. President Smith asked if a decision had been made about location of the proposed Federal Court House. Mr. Bowers replied that no decision had been made, but that three sites were under consideration - Fifth Avenue Post Office Annex, City Hall, and the former Sears Building. President Smith asked if the EWEB Steam Plant facility had been identified as a potential location. Mr. Helgeson replied that there had been discussion regarding the site. Commissioner Bishop requested information about the River Front Urban Renewal District. Mr. Bowers said he would provide information to Commissioners. President Smith reported that the Board of Commissioners had embarked on a EWEB headquarters site assessment. She said a work plan was being developed to complete the project and suggested that its conclusions could be helpful to the City in its planning processes. President Smith asked if it would be possible for an EWEB representative to participate in City discussions regarding "Return to the River" considerations. Mr. Bowers stated that he would find a way to make such participation possible. ELECTRIC INDUSTRY RESTRUCTURING EWEB Electric Division Director Garry Kunkel reviewed developments related to restructuring of the electric industry. He said that electric utilities had been heavily regulated and had exclusive service territories assigned prior to 1992, but that the Federal Energy Policy Act and Federal Energy Regulatory Commission had since mandated open transmission access and deregulation of"wholesale" power sales. He noted that the U.S. Congress was currently considering five bills designed to deregulate "retail" power sales. He also noted that 45 state legislatures were considering deregulation bills and that 20 states already had some form of deregulation law in place. Mr. Kunkel reviewed EWEB policies on restructuring and deregulation legislation, as follows: Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 11 · The Board must retain authority to authorize retail access to its customers. · There must be an ability to compete equally, have protection from cost shifts, and have the ability to recover stranded costs. · There must be provisions for public purposes such as continuing conservation, developing renewable energy sources, and providing low income assistance. Mr. Kunkel described elements of Senate Bill 1149 under consideration in the 1999 Oregon Legislative Session, as follows: · EWEB would have the right to decide the extent and timing of open access to all of its customers. · EWEB would have the right to decide the extent of stranded costs, and its allocation and collection method. · If open access was granted, EWEB would be required to spend three percent of its total revenues on public purposes, as it determined best. · Cities would be able to require Contributions-In-Lieu-of-Taxes from all energy providers. Mr. Kunkel stated that Senate Bill 1145 had broad support from a private utilities, business, environmental, and customer group coalition. He said that PacificCorp was the major opposition to the bill, citing issues of timing, inequities, and stranded costs. He said likelihood of the bill passing was estimated at +/- 60 percent. Mr. Kunkel expressed appreciation for the support given to EWEB in its lobbying efforts regarding Senate Bill 1145 by Michael Redding, City Legislative Lobbyist. Councilor Meisner left the meeting at 8:15 p.m. Councilor Kelly asked ifEWEB's support for Senate Bill 1145 was "making the best of a bad situation." Mr. Kunkel replied that EWEB would prefer that no universal access to its retail customers was allowed, but that protections provided in the bill were the best that could be anticipated. FLUORIDE President Smith stated that the Board of Commissioners was regularly approached by advocates and opponents of adding fluoride to the City's water system. She said its positive impact on community health was widely supported, but that the Board had determined it would not pursue fluoridation on its own because voters had approved and rejected it on two different occasions. She said the Eugene Dental Society had not been able to place a voter initiative on the ballot. Councilor Nathanson recommended that Lane County become the advocate for fluoridation of water because it was normally responsible for health issues. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 12 Councilor Kelly said he agreed with Councilor Nathanson and that he believed the Lane County Department of Health and Human Services could provide an ideal forum for discussion of fluoridation issues. He said he believed the impetus for consideration of the issue needed to come from the medical community. STEAM UTILITY CONTRIBUTIONS-IN-LIEU-OF-TAXES Mr. Helgeson reported that EWEB would be appearing before the City Council in July to request consideration of changing Contributions-In-Lieu-of-Taxes by the Steam Utility to a franchise fee. He said doing so would keep the service affordable to customers, including the City. OTHER Councilor Lee reported that the City Council was forming an Urban Watershed Council to deal with various issues related to Endangered Species Act listings and river pollution. He asked if EWEB was interested in participating. President Smith replied that EWEB staff were currently involved in discussions regarding such involvement and that full participation seemed likely. Commissioner Bishop said she had learned that the City Council was forming a group to study the feasibility of paying Councilors a salary. She said she wholeheartedly supported the possibility. President Smith expressed appreciation for the participation of Councilors, Commissioners, and staff in the meeting. She said she believed it would be valuable to establish a regular schedule of joint meetings. Joint Work Session Board of Commissioners/City Council June 9, 1999 Page 13 Councilor Kelly said he also found the meeting useful. President Smith adjourned the meeting of the EWEB Board of Commissioners at 8:35 p.m. Vice President Nathanson adjourned the meeting of the Eugene City Council at 8:35 p.m. Krista Hince, Susie Smith EWEB Assistant Secretary EWEB President James Johnson Eugene City Manager