SPRINGFIELD UTILITY BOARD 223 A STREET, SUITE F SPRINGFIELD, OR MINUTES: January 11, 2017

Transcription

1 SPRINGFIELD UTILITY BOARD 223 A STREET, SUITE F SPRINGFIELD, OR MINUTES The regular session of the Springfield Utility Board was called to order by Chair Riggs-Henson at 6:55 p.m. ATTENDANCE: Board: David Willis, Chair; John DeWenter, Vice Chair; Pat Riggs- Henson; Virginia Lauritsen. Staff: Jeff Nelson; Bob Fondren; Sanjeev King; Greg Miller; Dave Embleton; Nick Amann; Janis Brew; Cindy Flaherty; Maria Trappen; Mary Bridget Smith, Attorney for the Board. Others: Ken Boyst; Kelly Hoell and Mark Johnson, LTD; Jeff Griffin, WHA. MINUTES: Jeff Nelson shared a brief revision to the minutes with the Board. * After Board consideration of those revisions, John DeWenter motioned, and Virginia Lauritsen seconded, to accept the revised December 14 regular Board minutes. This motion CARRIED unanimously. ACCOUNTS PAID: * David Willis motioned, and John DeWenter seconded, to approve the accounts paid listing, as presented. This motion CARRIED unanimously. BUSINESS FROM THE AUDIENCE: None. BUSINESS FROM THE BOARD: Appointment to Fill Vacant Board Position No. 4 Board Chair Pat Riggs-Henson noted that the Board had met earlier this evening and conducted interviews of three candidates who applied to fill the vacancy in Board Position No. 4 after Ken Boyst retired from the Board following the November Board meeting. The Board would like time to work with staff to notify all applicants of the Board s decision and the new Board member will be asked to attend the next Board meeting, on February 8, to be formally sworn in by SUB s legal counsel.

2 Page 2 Adoption of Resolution , Retirement of Board Member Ken Boyst Board Chair Pat Riggs-Henson informed the Board that Ken Boyst, retired Board member, asked we move up Adoption of Resolution to be next in line on the Agenda. Chair Riggs-Henson noted that Ken Boyst retired from the Board, effective following the November 9, 2016, Board Meeting. Board Chair then asked Board member Virginia Lauritsen to read Board Resolution into the record: WHEREAS, Ken Boyst has faithfully served the Springfield Utility Board and its customers as a member of the Board since January 1, 2007, with dedication, honor and distinction; and WHEREAS, Ken Boyst during his tenure on the Board has provided leadership and direction for the successful operation of the Utility; and WHEREAS, Ken has given unselfishly of his time to assist the Board in providing the best possible municipal utility services to the citizens of Springfield at the least possible cost consistent with sound business principles. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Springfield Utility Board expresses its sincere appreciation and gratitude to Ken Boyst for his tireless and devoted service to the Springfield Utility Board and its customers. * Pat Riggs-Henson motioned, and David Willis seconded, to adopt Resolution , expressing Springfield Utility Board s appreciation for Ken Boyst and his 10 years of dedication to SUB and its customer owners as a member of the SUB Board of Directors (Exhibit A). This motion CARRIED unanimously. Board member Lauritsen then presented to Mr. Boyst a plaque engraved with the Board s appreciation. Election of Officers and Appointments Chair Riggs-Henson opened the election for the 2017 officers and appointments and asked for nominations for the position of Board Chair. * Virginia Lauritsen nominated David Willis as Board Chair for 2017, and John DeWenter seconded the nomination.

3 Page 3 Chair Riggs-Henson asked if there were any further nominations for the position of Board Chair. Hearing none, she closed the nominations and called for a vote. David Willis was unanimously elected to serve as Board Chair for Chair Riggs-Henson stepped down and turned the meeting over to the new Board Chair, David Willis, who continued the election process. Chair Willis asked for nominations for Board Vice-Chair. * Virginia Lauritsen nominated John DeWenter as Board Vice-Chair for 2017, and Pat Riggs-Henson seconded the nomination. Chair Willis asked if there were any further nominations for the position of Board Vice-Chair. Hearing none, she closed the nominations and called for a vote. John DeWenter was unanimously elected to serve as Board Vice-Chair for * David Willis motioned, and Pat Riggs-Henson seconded, that the Board make the following appointments: Jeff Nelson as Secretary-Treasurer. John DeWenter as Liaison to the Springfield City Council. Jeff Nelson, Virginia Lauritsen, Shawn Madison, Robin Musgrove, Amy Widmer (Schaaf), Janis Brew, and Bob Fondren (Plan Administrator), to SUB s 2017 Retirement Plan Review Committee. NO ACTION NEEDED AT THIS TIME: In 2014, the Board awarded a 3-year contract to Moss Adams, LLC, for auditing years The Board does not need to take action for Auditing services for 2017 at this time. A recommendation for 2017 auditing services will be brought forward after the current audit for 2016 is completed. David Willis to serve as SUB s Voting Delegate at the APPA Legislative & Resolutions Committee meetings for This motion for appointments CARRIED unanimously.

4 Page 4 Authorization of Updated Retainer Agreement and Appointment of Leahy, Van Vactor, Cox and Melendy as Legal Counsel to the Board Jeff Nelson updated the Board that it wasn t possible to include the Updated Agreement in the Board packet for consideration at this meeting. Mary Bridget Smith recommended this be pushed out to February s Board meeting, so the Board could review the proposal prior to taking official action. It was determined the Board could take separate action and formally appoint Leahy, Van Vactor, Cox and Melendy as the Board s legal counsel but wait to take action on the Updated Agreement at the February 8 Board meeting. * David Willis motioned, and John DeWenter seconded, to appoint Leahy, Van Vactor, Cox and Melendy as legal counsel to the SUB Board of Directors, subject to Board review of the Updated Agreement. This motion CARRIED unanimously. BUSINESS FROM THE GENERAL MANAGER: Adoption of Board Policy 1-1-7, Impartial Information Regarding the Expected Effect of Ballot Measures Presentation on SUB s 2016 Utility Rate Comparison and Incentives Jeff Nelson updated the Board that we provided the documentation and recommendation on language from SUB s attorney to the Board. After Board discussion, the general consensus was to deliberate further and take action at the February 8 Board meeting. Referring Board members to his presentation (Exhibit B), Jeff Nelson shared background on SUB s Productivity Incentives Program. The existing program was revisited a number of years ago, and in 2015 the Board, once again, reviewed the program and modified it for the year Based on the modification, achievement of the incentives is based on two Threshold Goals which Mr. Nelson reviewed with the Board. Threshold Goal #1 relates to SUB s combined electric and water utility bill savings and financial health (the E/R Ratio).

5 Page 5 Threshold Goal #2 is a divisional goal for every division at SUB: Electric, Water, Resource Management, Human Resources, and MIS/Customer Service. These divisional goals are established each year with approval from the General Manager and formal agreement with Divisions. These divisional goals act as a tool or roadmap for the annual work plan. Mr. Nelson reviewed matrixes on the residential electric and water rates comparisons. He also reviewed the residential customer bill savings chart which basically depicts the trend over the years. Mr. Nelson then reviewed the matrix on SUB s 2016 Incentive Program and referenced how the matrix works when using a maximum score and a minimum score and how it trends over time. A copy of SUB's 2016 Rate Comparison Binder (Exhibit C) was also provided at the Board meeting. No questions from the Board nor the audience. Update on SUB s Property and Liability Insurance Mr. Nelson asked Janis Brew to introduce Jeff Griffin of Wilson- Heirgood Associates (WHA), SUB s insurance agent of record. Mr. Griffin handed out a brochure on WHA s renewal proposal for SUB (Exhibit D). He then proceeded to give the Board an overview of SUB s performance and SUB s 2017 premium. SUB s renewal contract with Special Districts Association of Oregon (SDAO) for property and liability insurance coverage is effective January 1, 2017, and runs through December 31, Mr. Griffin presented WHA s risk assessment of SUB. SUB stands out in comparison to others. There are a few benchmarks that they look at from a risk management perspective. The first thing they look at is Best Practices, where they have you meet several benchmarks. SDAO has a program where if you do certain things, you get a reduction of your premium. They designed that in hopes that by doing those things, you would not get into trouble. SUB s management team is doing a great job, said Mr. Griffin. The second thing they look at is Longevity Credit, which is based on SUB s loss history and is compared with other entities. SUB has done very well in 2016 and will get back $13,550. This really says not only is SUB doing a lot of these certain things but the results are good. The third thing they look at is SUB s Staff. Workers compensation benchmarks every employer against the other. This benchmark is at $1.00. SUB comes in at $0.88 and even though that doesn t seem like much, it s huge when for SUB s line of work we should be at $1.08. So SUB is not only saving 12% but SUB is

6 Page 6 in a better tier; and more importantly your employees get home safe at night. SUB is doing absolutely beautiful, said Mr. Griffin; he would benchmark SUB against any other of the utilities in the state. Mr. Griffin then reviewed SUB s overall premium with the Board and said that all of SUB s safety protocols are sound, as SUB puts safety and users first. Mr. Griffin expressed that it was an honor and pleasure to be here. The Board thanked Mr. Griffin for his very positive report. Update on the Department of Environmental Quality Carbon Intensity Jeff Nelson recognized Lane Transit District (LTD) representatives, Kelly Hoell and Mark Johnson, and then provided the Board with an update on follow-up items and next steps related to ODOE s Carbon/Intensity designation and registration as a producer under current DEQ rules. Mr. Nelson found that there is additional work that needs to be done until we have a better understanding in terms of how utilities function under this designation. DEQ regulations don t harmonize well with the way the state has implemented regulatory requirements at the wholesale level. Mr. Nelson is optimistic in regards to further conversations with the DEQ regarding their rules and regulations. If they were to set it up so that the applicant to be a generator of credits is required to register with the utility or if the DEQ is required to provide usage information to the utility, then there would be a way for the utility to track the information. Right now there s a big information gap. Mr. Nelson asked DEQ if we could register as a producer with ODOE s Carbon/Intensity program and then a year later re-register. DEQ said no, once we are in, we re in. Mr. Nelson said we have not taken any steps, as we need to have further discussions with DEQ to see if we can get some clarity on this process. Board member Riggs-Henson asked what our next steps were. The next step is to continue to leave phone messages and make sure that with everything else going on with DEQ that we can have a clear understanding, or there may be a better way for us to explain our concerns and see if there s a way for them to make some adjustments, responded Mr. Nelson. Mr. DeWenter asked if there is a timeline from an LTD standpoint in which we need to give them an answer.

7 Page 7 Mr. Nelson responded that LTD can go forward and get a credit based on the state wide average for carbon intensity and wait until SUB works it out with DEQ and go forward at that point. Can LTD retroactively pick up those credits, asked Mr. DeWenter? No that we currently know, responded Kelly Hoell. LTD s electric buses are expected to arrive in February or March They were hoping to get this issue resolved sometime soon. Mr. Nelson said we will continue to move forward and keep LTD informed of our progress and hopefully we will make progress with the DEQ. Outstanding Performance Designation Dave Embleton provided an update on SUB s progress towards achieving an Outstanding Performance designation under the Oregon Health Authority s Drinking Water Program. Over the last three years we have worked diligently on SUB s water system and water quality. We look at wells, distribution systems, and check for any contaminants or water problems. We also made sure procedures that SUB follows are thorough, follow specific requirements, and that proper documentation and deadlines were met for this award designation. There are specific limits to levels in contamination, i.e. e-coli, and if the contaminant was present in the last three years, then the water system would not qualify for this award. Mr. Embleton said there are 260 water systems out of a total of 360 in Oregon working towards this award. Mr. Embleton then showed SUB s Outstanding Performance award to the Board. The Board thanked Mr. Embleton for his update and felt the work on this designation was extremely well done. Temporary License Agreements for Willamalane and the City of Springfield to Use SUB Property Jeff Nelson addressed the temporary license agreements for the City of Springfield and Willamalane. He reminded the Board that they previously had given authorization to execute these temporary license agreements with the City of Springfield and Willamalane. The temporary license agreement with the City was to allow the City of Springfield to use a portion of SUB s Steam Plant property for the Millrace Trailhead. Mr. Nelson did not have

8 Page 8 the original agreement to share as reference but that he was asking the Board to authorize the renewal of this temporary license agreement with the City which would essentially be the same agreement just extending it out to March 31, Mr. Nelson then referred the Board to the temporary license agreement for the Millrace Path with Willamalane, located in the Board binder, which would also terminate March 31, 2017, or upon execution of an easement replacing a license, whichever would be earlier. The reason why we want to have a license with Willamalane is for a new use on SUB s property as they ve finished the path and want to open up use to the public, said Mr. Nelson. Due to a court ruling on an unfortunate accident that occurred in Portland, and how that applies to public use of public space, we want to ensure SUB s liability exposure is limited if we are allowing a third party to use SUB s property. Mr. Nelson disclosed that the final result for the Steam Plant property with the City of Springfield is essentially a property swap, and we re on track with that. The end result with Willamalane is that once they complete a survey, then we will be working on completing an easement for them and will bring that to the Board for authorization. After brief discussion, Mr. Nelson recommends authorization from the Board to execute license agreements approved by SUB s attorneys for the use of SUB s property by Willamalane Parks and Recreation and the City of Springfield, consistent with what has been presented and what has been presented in the past. * Virginia Lauritsen motioned, and John DeWenter seconded, to authorize SUB s General Manager to execute license agreements approved by SUB s attorneys for the use of SUB s property by the City of Springfield (Exhibit E) and Willamalane Parks and Recreation (Exhibit F), as presented. This motion CARRIED unanimously. Approval of Disclaimer of Interest in Waterline Easement Jeff Nelson referred the Board to their documentation regarding vacating an existing easement and a new easement for our facilities. SUB s Water Division has been asked to abandon an existing eight foot (8 ) easement that runs across multiple parcels (Tax lots 800, 900, 900 on plat and tax lot 1800 on

9 Page 9 plat ). This includes a dedication of a new eight foot easement across the same tax lots. We recommend that the Board approve the Disclaimer of Interest after the new easement is executed. Attached is a copy of the Disclaimer of Interest and a map showing the easement to be vacated and the easement to be re-dedicated. Greg Miller gave the Board a brief report on this item. * John DeWenter motioned, and Pat Riggs-Henson seconded, to approve the Disclaimer of Interest in an existing eight-foot easement, as presented, and only after a new eight-foot easement is executed across the same tax lots (Exhibit G). This motion CARRIED unanimously. Award of Bid No The Electric Division recently solicited bids for 30,000 feet of underground 19-Strand Aluminum 25kV cable and 5,000 feet of underground I/0 Triplex Aluminum Cable for stock. Six bids were received. Staff recommends the Board award this bid to Platt Electric/CME for $81,150 with no exceptions. * Pat Riggs-Henson motioned, and Virginia Lauritsen seconded, to award Bid No to Platt Electric/CME for the lowest bid meeting specification, with no exceptions, in the amount of $81,150 for 30,000 feet of underground 19-strand Aluminum 25kV cable and 5,000 feet of underground 1/0 Triplex Aluminum Cable for stock (Exhibit H). This motion CARRIED unanimously. OMEU Update Jeff Nelson shared information on changes with OMEU. After previous discussions with the Board, Mr. Nelson was to come back with the maximum amount that would be essentially a modification to the current dues structure where there would be a cap on any individual member having to pay a due amount. Right now we pay about $44,000. Mr. Nelson would like to take back a recommendation to OMEU on what a cap might be for each individual member. He asked if the Board would be open to a $50,000 cap over the next three to five years. Mr. Nelson recommends to the Board that he go back to OMEU Board to propose a cap at $45,000 and that cap would go up $1,000 each year for the next five years, up to its max of $50,000. The caveat to this would be that OMEU does have a substantial reserve, said Mr. Nelson, and he wouldn t want to get in the situation where we start using the cap when other members don t

10 Page 10 increase their dues and rely on reserves, which we contributed to, in order to pay for compensation. Mr. Nelson also recommends to the Board that he have further discussions with the OMEU Board to ensure that we are not going to touch the reserve up to a certain point. After brief discussion the Board s consensus was for the General Manager to move forward with his recommendations as presented. TEAM Springfield Update Upcoming Meetings & Events The TEAM Springfield Annual All Elected Officials Update meeting will not be held on January 30, Mr. DeWenter thought it had been rescheduled for the first Monday in February. Mr. Nelson will follow up on this date with the City of Springfield. The Chamber of Commerce Awards & Installation Banquet will be held January 20, The Board made a donation and as a Presenting Sponsor this includes a table for 8. This table is full, however, if there are more Board members who d still like to attend, we can certainly arrange for more seats. The Joint SUB/EWEB Board meeting at EWEB will be March 21, Jeff Nelson shared that he received a list of items/topics from John DeWenter. These are topics Mr. DeWenter would like more information on in preparation for this meeting. Mr. Nelson also said that he and Frank Lawson have had discussions including future water source development, how can SUB work with EWEB on certain larger items. Mr. Nelson thought it would also be helpful to have discussions on how SUB and EWEB are cooperating operationally. East Springfield is another issue that Mr. Nelson would like to have clarity on certain electrical territory issues. Mr. DeWenter suggested a special session be scheduled within the next 30 days for the Board members to work together and prepare for the joint meeting which would allow us to identify all our issues prior to the meeting. Ms. Lauritsen suggested the Board invite the new Board member to sit in on this meeting, as an observer, so as to be abreast of the subject matter of this work session. Following the discussion, the Board s consensus was to schedule two work sessions for 6:00 p.m. prior to each of the next two Board meetings in order to prepare for the joint meeting.

11 Page 11 ADJOURNMENT: The meeting was adjourned by consensus at 8:17 p.m., Board Chair ATTEST: Jeff Nelson, Board Secretary