Minutes of PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY June 21, 2016 NEWPORT CONFERENCE ROOM, NEWPORT, WA

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1 Minutes of PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY June 21, 2016 NEWPORT CONFERENCE ROOM, NEWPORT, WA Present: Staff Present: Others: Richard A. Larson, President Daniel L. Peterson, Vice President Curtis J. Knapp, Secretary F. Colin Willenbrock, General Manager Management/District Staff C. Matthew Andersen, Winston & Cashatt Lawyers Karen Willner, Clerk of the Board None The meeting was called to order at 8:32 a.m. by Richard A. Larson, President. CONSENT AGENDA: The minutes from the June 7, 2016 meeting and today s revised agenda were reviewed. Vouchers audited certified by the auditing officer as required by RCW , and those expense reimbursement claims certified by RCW , have been recorded on a listing, which has been made available to the Board. As of this date, June 21, 2016, the Board, upon motion by Commissioner Knapp and seconded by Commissioner Peterson approved the following: The minutes of June 7, 2016 meeting and the revised agenda for June 21, Payment of those vouchers, included in the list referred to above and further described as follows: Voucher Nos through in the total amount of $340,546.66; Wire Transfers/ACH in the total amount of $3,569,690.59; and ACH payroll transactions in the total amount of $264, for the payroll ending May 31, BUSINESS FROM THE PUBLIC: There was no business from the public. PUBLIC RECORDS ACT TRAINING: F. Colin Willenbrock, District General Manager, provided background history for the Public Records Act and training. C. Matthew Andersen, Winston & Cashatt Lawyers, reported that public records is related to the public s business and it is a process. He explained the need to be transparent to the public. He provided a Powerpoint presentation on the Open Public Meetings Act, the Public Records Act, and Records Retention. Discussion was held. The Board thanked Mr. Andersen for providing the training. Following a 5-minute recess, the meeting resumed. EXECUTIVE SESSION PENDING AND/OR POTENTIAL LITIGATION: A 40-minute executive session on pending and/or potential litigation commenced at 10:00 a.m. The following were in attendance: Board of Commissioners; F. Colin Willenbrock, General Manager; April Owen, Director, Finance/Auditor; Mark Cleveland, Power Production Manager; and C. Matthew Andersen, Winston & Cashatt Lawyers. The executive session was extended for 5 minutes. The executive session adjourned at 10:45 a.m. and the Board returned to open session. There was no final action taken.

2 SAFETY SPOTLIGHT: Discussion was held regarding Energy Northwest s audit findings and the changes made by the District; a safety presentation given at a direct report meeting; and being aware of where the District s exits are located. CUSTOMER SPOTLIGHT: Discussion was held regarding a customer s cost of service inquiry and the District s overhead costs for providing service to customers. ACTION ITEMS: Electrical Service and Credit Policy Revision. Sarah Holderman, District Treasurer/Customer Services Manager, explained the revisions. A motion was made by Commissioner Peterson and seconded by Commissioner Knapp to approve the policy revision. The motion passed unanimously. Declaration of Surplus Property Community Network System (CNS) Fiber Building Miscellaneous Items. Mr. Willenbrock explained the details. Based on staff recommendation, a motion was made by Commissioner Knapp and seconded by Commissioner Peterson to declare the CNS Fiber Building miscellaneous items as being no longer necessary, material to, or useful in the operations of the District and, therefore, surplus to the needs of the District. The motion passed unanimously. The staff will proceed as appropriate. Resolution No Interlocal Agreement with the Newport School District for CNS Fiber Building surplus property transfer. A motion was made by Commissioner Peterson and seconded by Commissioner Knapp to adopt the resolution and authorize the general manager to execute the agreement. This is a benefit to the District. The motion passed unanimously. Declaration of Surplus Property Transformers. Amber Orr, District Engineering Manager, explained the details. Based on staff recommendation, a motion was made by Commissioner Knapp and seconded by Commissioner Peterson to declare the transformers as being no longer necessary, material to, or useful in the operations of the District and, therefore, surplus to the needs of the District. The motion passed unanimously. The staff will proceed as appropriate. Resolution No Sale of Transformers. A motion was made by Commissioner Peterson and seconded by Commissioner Knapp to adopt the resolution. The motion passed unanimously. Cyber Security Policy Revision. A motion was made by Commissioner Knapp and seconded by Commissioner Peterson to approve the policy revision. The motion passed unanimously. MANAGEMENT REPORT: F. Colin Willenbrock, General Manager: He and Brodie Larson, District Senior Power Supply Operator, will take a tour of Perkins Slough tomorrow. He; Mark Cauchy, District Director, Regulatory & Environmental Affairs; and April Owen, District Director, Finance/Auditor, continue to have meetings with the Kalispel Tribe to discuss the Settlement Agreement. They will attend a meeting on June 28 in Usk with the Kalispel Tribe and Seattle City Light (SCL). Discussion was held. He attended a Washington Public Utility Districts Association (WPUDA) Summer Municipal Attorneys meeting on June 16 in Seattle and provided an overview. Page 2 Minutes, June 21, 2016

3 He; Chris Jones, District Director, Distribution, Engineering & Operations; and Cecil Taylor, District Safety & Environmental Coordinator, attended a Hyrails Tour with the Port along the District s railroad rights-of-way easement and he provided an overview. Discussion was held. He attended Northwest Open Access Network (NoaNet) Board meeting on June 8 in Spokane and reported they honored Rhonda Thomas, District retiree, via resolution, for her service as a member of the board. He provided an overview of the meeting and and reported the retirement of debt was discussed. Kim Gentle, Director, Power & Risk Management: She reported this time of the year is dedicated to the net requirement forecast with Bonneville Power Administration (BPA). She provided an overview. She reported the Distributed Generation (DG) incentive process is commencing in a week and the District has four DG solar customers with two of those customers receiving the incentives. She explained the financial incentive occurs once a year. Discussion was held. Sarah Holderman, Treasurer/Customer Services Manager: She reported the District is doing all its Automated Meter Reading meter reads to verify the reporting is accurate. Discussion was held. She reported the District s Neighbors in Need (NIN) Low Income Assistance Program maximum donation to receive the full tax credit is $12,150. Discussion was held. ACTION ITEMS (continued): NIN Low Income Assistance Program Donation. Based on staff recommendation, a motion was made by Commissioner Peterson and seconded by Commissioner Knapp to donate $12,150. The motion passed unanimously. She attended a Public Utilities Risk Management Services (PURMS) meeting on June 8-9 in Seattle and reported that cyber insurance will be added to the insurance liability pool to allow all members to be covered. She reported that PURMS has cash reserves on hand which are increasing by $250,000 and the impact to the District is approximately $20,000. Discussion was held. Mark Cauchy, Director, Regulatory & Environmental Affairs: He reported the District received the timber cruise report for surplus of the District s real properties and forwarded the report to the appraiser. He reported the Town of Cusick is now charging a Cusick Boat Launch parking fee. The fee is $10 per day or you can purchase an annual renewable pass for $50. Discussion was held. He attended a Fish Subcommittee meeting last week to discuss the modified design of the Upstream Fish Passage Project at Box Canyon. He reported the District is gathering more information on the fish entrances and fluid dynamics of the water flows and fish spawning patterns. Discussion was held. Robert Fritz, Community Network System Supervisor: He reported that crews are doing new fiber installations and new fiber builds. They are getting a good number of fiber line extension quotes and there is good public interest. He reported staff is in the process of revising the District s CNS policies and fees. Staff is also in the process of moving personnel and equipment from the CNS Fiber Building facility. Page 3 Minutes, June 21, 2016

4 Discussion was held regarding ifiber marketing its television connections and the Metaline cell tower coverage area. Commissioner Larson reported that John Middleton, member of the public, expressed his appreciation of Mr. Fritz s and the CNS staff s assistance with providing service in the Ione area. Mark Cleveland, Power Production Manager: He reported that mediation continues on the Andritz settlement. Andritz continues work on unit #1 turbine shaft He reported the Box Canyon Upstream Fish Ladder Project still needs approval from the Fish Subcommittee. A large number of submittals were sent to the Federal Energy Regulatory Commission and once approved, J.W. Fowler Company can start building the concrete pad for the crane and start on the cofferdam. A pre-construction meeting with the contractor and subcontractors will be held tomorrow to discuss the logistics and scheduling. The boat launch will be blocked off at some point and the water level will be lowered at the forebay in late August or early September. Discussion was held. He reported that SCL received an extension for putting in the fish spawning beds but this is currently on hold while more research is being done. He reported that Jake Hanson, District Power Supply Operator/Technician/Electrician, has submitted his resignation and will be leaving the District effective June 30. Mr. Cleveland will work with Lloyd Clark, District Human Resources Manager, to advertise for the hire position of a Journeyman Hydro Operator. Mr. Willenbrock expressed his appreciation of Mr. Hanson for being a hard worker and great employee. Amber Orr, Engineering Manager: She reported the District is getting its first Supervisory Control and Data Acquisition mock up design this week. Mike Boyle, District Information Technology Engineer, will be working on this project tomorrow. She reported the District purchased a transient analysis planning tool for the Operations Department. Northwest Public Power Association provided a free training on the tool on June 7 at the District. Further webinar training will be given. She reported the District is currently looking to purchase a distribution analysis software tool which will allow more use of the District s fiber backbone. It will consist of a hookup to a regulator for load control and data harvesting of devices. She is hoping to have the tool by next year. April Owen, Director, Finance/Auditor: She reported the Finance Department has closed out the books for May. Kelly Scherf, District Senior Accountant, will provide a report to the Board. She reported the District is being reviewed by Moody s and there is a committee meeting next week to determine the District s bond credit rating. Staff has been talking to banks this week regarding lines of credit to ensure interim financing to do a bond issuance. Discussion was held. Following a 30-minute working lunch, the meeting resumed. COMMISSION REPORT: Commissioner Peterson attended a BPA Kick Off Integrative Program Process meeting via webcast on June 16 and a Public Power Council (PPC) Ice Harbor Dam Tour on June 17 in Pasco. He provided an overview. Page 4 Minutes, June 21, 2016

5 Commissioner Knapp attended a PURMS meeting on June 8 9 in Seattle. Commissioner Larson attended a NoaNet Board meeting on June 8 in Spokane and an Economic Development Council (EDC) meeting on June 15 in Ione. He provided an overview. COMMISSION BUSINESS: The Board of Commissioners will attend a Special Board Meeting on July 6 in Newport and via teleconference. Commissioner Knapp will attend a WPUDA Water Workshop in June in Olympia. Commissioner Peterson will attend a Pend Oreille Lakes Commission meeting on June 29 in Dover and a PPC meeting on July 1 in Portland. Commissioner Larson will attend a Tri-County Economic Development District meeting tomorrow in Colville and an EDC meeting on June 24 in Newport. EXECUTIVE SESSION PERSONNEL: A 45-minute executive session on personnel commenced at 12:30 p.m. The following were in attendance: Board of Commissioners; and F. Colin Willenbrock, General Manager. The executive session was adjourned at 1:12 p.m. and the Board returned to open session. There was no final action taken. There being no further discussion to come before the Board, the meeting adjourned at 1:13 p.m. ATTEST: Secretary General Counsel Approved as to Form President Page 5 Minutes, June 21, 2016