MINUTES OF THE MEETING OF COMMISSIONERS. December 20, The regular meeting of the Commissioners of Public Utility District No.

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1 MINUTES OF THE MEETING OF COMMISSIONERS December 20, 2016 The regular meeting of the Commissioners of Public Utility District No. 1 of Lewis County was held in the Chehalis Office of the District on the above date at 10:00 a.m. Those present were Charles TenPas, President; Dean Dahlin Vice President and Ben Kostick, Secretary. Also present were Bob Geddes, Manager; Rich Bauer, Treasurer; Brad Ford, Auditor; Stacy Davis, Executive Assistant. Additional attendees included: Dan Kay, Engineering Manager; Jeff Baine, IS Manager; Bryan Watt, Operations Manager; Dave Alumbaugh, Network Administrator; Bill Cummings, Senior Database Administrator; Bonnie Young, System Analyst; Lora Provolt, HR Manager; Matt Samuelson, Power Analyst; Mike Kohn, Cowlitz Falls Project (CFP) Biologist; Turk Moon, Line Superintendent; Joe First, CFP Superintendent; Marvin Keller, Engineer; and Norm Goodbla, Energy Services Manager. Steve Grega and Dave Muller, members of the public; Cindy Zehnder and Diana Carlen from Gordon Thomas Honeywell; and J. Vander Stoep and Allen Unzelman, Attorneys were also present. The Manager presented the You Rock Employee Appreciation Award to Dave Alumbaugh. Mr. Alumbaugh was nominated in recognition of his quick response on December 8, 2016 to the super bug that infected the District s system. Mr. Alumbaugh s leadership, knowledge and skill suppressed the virus from spreading, eradicated it from the District s network and restored the system back to 100% operational status. Commissioner Kostick presented a You Rock Employee Appreciation Award to Bob Geddes. Mr. Geddes was in recognition of the positive changes that he has implemented during his tenure at the District. Mr. Geddes solid leadership has helped guide the District to function more efficiently and allowed collaboration between staff and departments.

2 Commissioner TenPas welcomed staff and public to the meeting. Ms. Provolt requested Executive Session as authorized by RCW (1)(g) to review the performance of a public employee. Mr. Grega requested public comment after Agenda Item No. 12, CFP fish evaluation plans. The Minutes of the December 13, 2016 meeting was presented. Following review, Commissioner Dahlin moved to approve the Minutes as presented. The motion was seconded by Commissioner Kostick. There was no discussion. Commissioner TenPas supported the motion and it carried unanimously. Cowlitz Falls Project vouchers numbered to and including totaling $45, and Electric System vouchers numbered to and including totaling $4,053, were presented. Following examination and discussion, Commissioner Kostick moved to approve the vouchers as presented. The motion was seconded by Commissioner Dahlin. Following review and discussion, Commissioner TenPas supported the motion and it carried unanimously. The following work orders were presented: Work Order No. Description Amount NC Replace broken pole at intersection of Westlake Ave $11, and 3 rd Street, Morton NC Convert OH primary to UG per State Bridge $21, replacement project 2856 SR 508, Onalaska. NC Relocate 575 ft primary UG at 2485 SR-508, $12, Onalaska due to WSDOT bridge project. Commissioner Dahlin moved to approve the work orders as presented. The motion was seconded by Commissioner Kostick. Mr. Kay provided details of the work orders. Commissioner TenPas supported the motion and it carried unanimously.

3 Resolution No. 2758, A Resolution Ratifying the Employment of Daniel Kay as Manager of Public Utility District No. 1 of Lewis County, Washington and Fixing Compensation and Rescinding Resolution No was presented for its second reading. Commissioner Kostick moved to approve the resolution as presented. The motion was seconded by Commissioner Dahlin. Commissioner TenPas supported the motion and it carried unanimously. Ms. Davis presented a recommendation from Brian Kohler, Purchasing Agent, to award Quote No Q for the purchase of fuel for the Chehalis Operations Center to low bidder, Wilcox and Flegel totaling $14, Commissioner Dahlin moved to award Quote No Q to Wilcox and Flegel as presented. The motion was seconded by Commissioner Kostick. Following review of the fuel prices, Commissioner TenPas supported the motion and it carried unanimously. Ms. Davis stated that commissioner appointments for the Public Utility District No. 1 of Lewis County Board of Commissioners for 2017 will need to be modified to remove Commissioner TenPas and add Commissioner Cournyer. It was discussed that Commissioner Dahlin serve as President, Commissioner Kostick serve as Vice President and Commissioner Cournyer serve as Secretary. Following discussion, Commissioner Kostick moved to approve the appointments as discussed. The motion was seconded by Commissioner Dahlin. There was no further discussion. Commissioner TenPas supported the motion and it carried unanimously. Mr. Bauer presented the Pacific Underwriters Zurich 24 hour Accidental Death and Dismemberment Insurance renewal which coverage is for the Commissioners. Mr. Bauer stated that the benefit amount is up to $50,000. The cost for the last five years has been $39.00 per commissioner per year, totaling $ Following discussion, Commissioner Dahlin moved to approve renewal of the Zurich Accidental Death and Dismemberment Insurance Policy. The

4 motion was seconded by Commissioner Kostick. There was no further discussion. Commissioner TenPas supported the motion and it carried unanimously. Ms. Zehnder and Ms. Carlen provided a 2017 legislative session preview of its long session. The first day of the session will begin on January 9, 2017 with the last day of regular session on April 23, Ms. Zehnder noted that education funding will most likely dominate the 2017 legislative session as the legislature will need to increase funding for education by as much as $3.5 billion more in The Governor s proposed budget includes funding basic education by creating $4.4 billion in new revenue by: 1) imposing a carbon tax on fossil fuels, 2) imposing a 7.9% tax on capital gains on the sale of stocks, bonds and sales on earnings over $25,000 for individuals and $50,000 on couples, 3) increase the B&O tax rate on personal and professional services from 1.5 to 2.5% and 4) closes or changes five tax incentives. Ms. Zehnder outlined the Governor s proposal on the carbon tax noting that the tax would start at $25/ton and increase 3.5% annually, plus inflation and would generate about $1.9 billion in 2018 and about $2 billion in Ms. Zehnder further discussed the environmental community s post 2020 bill that includes all load serving utilities must meet 100% of any new energy and/or capacity need post 2020 with clean energy resources (not nuclear, fossil fuels and hydro resources), energy efficiency requirements are extended to all load serving entities. Ms. Zehnder noted that the Association of Washington Business along with others filed a lawsuit challenging the legal authority of Ecology to adopt a clean air rule carbon cap without legislative authority. Ms. Zehnder further touched on fuel mix reporting, back billing, solar incentives, pole attachments, retail authority for PUDs, and broadband services. Ms. Zehnder discussed the Washington Waters Coalition that will focus on the State s water infrastructure including storm

5 water efforts, flood reduction, and updating the infrastructure. Ms. Zehnder noted that a funding source has not been identified yet, but will be discussed as part of carbon reduction legislation and/or initiative. Ms. Zehnder noted that the District is seen as a leader in the efforts to get flood relief for the Chehalis River Basin. Mr. Vander Stoep provided a PowerPoint that outlined the Chehalis River Basin Strategies plans including: 1) flood reduction facility, 2) structural flood protection without flood retention facility, 3) nonstructural flood protection, and 4) restorative flood protection. Mr. Vander Stoep noted that the plans include flood reduction and fish habitat improvements. Mr. Vander Stoep recapped the history of flooding in the Chehalis River Basin and the reduction of fish runs over the last 30 years. Mr. Vander Stoep reported on the habitat projects and local flood projects underway. Mr. Vander Stoep noted that the Governor s Proposed Capital Budget includes $50 million for the Chehalis River Basin flood reduction. Mr. Vander Stoep further noted that of the $50 million, $13 million is for permitting of the project of a flood reduction facility in the upper Chehalis River Basin. At 11:13 a.m. the meeting recessed for a five (5) minute break. At 11:20 a.m. the meeting reconvened. Mr. Kohn showed a video of the new Cispus River release site. Mr. Kohn recapped the first phase evaluation of the adult Coho releases in October and November 2016 as part of the CFP Biological Opinion (BiOp) Reasonable and Prudent Measures (RPM) 6 (b) to reduce impacts of the CFP on ESA listed anadromous fish. Mr. Kohn outlined the proposed plans for the plans of the second phase evaluations in March-May 2017 including purchasing 150 adult radio tags and tagging adult winter steelhead, data collection and evaluation of initial survival, dispersal to spawning grounds and downstream migration survival following spawning. The

6 costs associated with the second phase evaluation plans will be approximately $25, Following discussion, Commissioner Kostick moved to authorize the second phase of the evaluation plans in the amount of $25, as presented. The motion was seconded by Commissioner Dahlin. There was no further discussion. Commissioner TenPas supported the motion and it carried unanimously Mr. Grega requested to rescind his resignation based on that the District did not hold up the agreed upon arrangement of his retirement. Mr. Grega discussed his history with the District and stated that he was treated poorly prior to his retirement and that the Cowlitz Falls Project employees were told not to talk to him. Mr. Grega provided a letter to the commissioners providing notice that he is withdrawing his retirement notice. Mr. Samuelson and Mr. Kay provided a brief report on the Western Public Agency Group (WPAG) meeting that he attended. Ms. Moses thanked those that attended the PUD Christmas Party last week and noted that it was a great success. At 11:35 a.m. Commissioner TenPas recessed the regular meeting and announced that the Commissioners and Human Resources would enter into an Executive Session for ten (10) minutes until 11:45 a.m. as authorized by RCW (1)(g) to review the performance of a public employee. Those present were Commissioners TenPas, Dahlin, and Kostick, and Ms. Provolt. At 11:45 a.m. the meeting reconvened and recessed to continue the Executive Session noted above for an additional five minutes. At 11:50 a.m. the regular meeting reconvened.

7 Mr. Kay thanked Mr. Geddes and Commissioner TenPas for their service to the District and to public power. The Manager noted that between him and Commissioner TenPas there is about 55 years of service to the public power community. Commissioner TenPas noted the excellent managers that he was fortunate enough to work with and outlined their successes during their tenure. Commissioner TenPas recognized the work that Mr. Geddes accomplished and stated that he was a manager of action. The Manager presented Commissioner TenPas with his Certificate of Service to the District. The Manager noted that Commissioner TenPas has provided service to the District and its customers since Mr. Kohn provided a framed photo of Commissioner TenPas at the Cowlitz Falls Project Trout Derby. Commissioner Dahlin thanked Commissioner TenPas for providing historic information of the utility. There being no further business, Commissioner Kostick moved to adjourn. The motion was seconded by Commissioner Dahlin. Commissioner TenPas supported the motion and it carried unanimously. ATTEST: /s/ Charles R. TenPas, President Tim Cournyer, Secretary _/s/ Dean L. Dahlin, Vice President, President Ben M. Kostick, Secretary Vice President