Minutes of PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY September 17, 2013 NEWPORT CONFERENCE ROOM, NEWPORT, WA

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1 Minutes of PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY September 17, 2013 NEWPORT CONFERENCE ROOM, NEWPORT, WA Present: Staff Present: Others: Curtis J. Knapp, President Richard A. Larson, Vice President Daniel L. Peterson, Secretary John Jordan, General Manager Management/District Staff Karen Willner, Clerk of the Board Nancy Schimmels, Bonneville Power Administration Account Service Manager Loren Baker, Loren Baker Consulting, LLC Roger Aydelott, Member of Metaline Falls Town Council Desiree Hood, Newport Miner The meeting was called to order at 9:00 a.m. by Curtis J. Knapp, President. BOARD WORKSHOP: Topics of discussion included: the Boundary Assignment Agreement; the October 7 public evening meeting draft agenda; the Pend Oreille Mines outage; last week s meeting with Box Canyon staff on finances; a customer line extension issue; the total dissolved gas (TDG) project regarding stoplogs; and Ponderay Newsprint Company s lighting project. CONSENT AGENDA: The minutes from the September 10, 2013 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, September 17, 2013, the Board, upon motion by Commissioner Peterson and second by Commissioner Larson, approved the following: The minutes of September 10, 2013 meeting and the revised agenda for September 17, Payment of those vouchers, included in the list referred to above and further described as follows: Voucher Nos through in the total amount of $669,343.30; one wire transfer in the total amount of $33, BUSINESS FROM THE PUBLIC: There was no business from the public. MANAGEMENT REPORT: John Jordan, General Manager: He attended a Northwest Open Access Network (NoaNet) Board meeting on September 11 in Seattle and provided an overview of the meeting. He reported that due to receiving a finding, NoaNet will ask the State Auditor s Office to do an annual audit. The 2014 draft budget was presented. NoaNet has turned up 35 cell sites and expects 70 more. There is a small amount of Broadband Technology Opportunities Program money left. Discussion was held.

2 He reported that a Central Washington Public Utilities meeting will be held this Friday at Benton County PUD and the last management preparatory meeting will be held next Friday at Grant County PUD. He distributed and reviewed the October 7 Public Evening Townhall meeting draft agenda. Discussion was held. Mark Cauchy, Director, Regulatory & Environmental Affairs: He reported that Bonneville Power Administration and the Army Corps of Engineers will have their annual meeting on setting the Lake Pend Oreille level this Thursday morning via teleconference. Discussion was held. He reported that a drawdown on Sullivan Lake started on September 3. The flows are currently at 45 cubic feet per second and will probably go up in a couple of weeks. He commended Brodie Larson, District Senior Power Supply Operator, on the great job he is doing in managing and calculating the drawdown water levels. Charlie O Hare, Chief Operating Officer: He provided Engineering and Operations updates and reported that crews are working on the distribution line at the Riverbend and Dalkena river crossings. The project should be done next Monday. Staff is busy with line extensions. He reported the line crews are busy right now with river crossings and the fiber project. Mr. Jordan reported that power collars are not getting installed because crews are busy working on the river crossing. Robert Fritz, District Community Network System (CNS) Supervisor reported that a monthly meeting with the retail service providers (RSP). Discussion was held. Mr. O Hare provided a Production update and reported that turbine unit #2 (the third unit to be refurbished) is projected to be finished in mid-november. The generator poles are being installed. The TDG project is moving along and submittals are being reviewed and drawings are being approved. Drawings are being approved for the fish passage. Mark Cleveland, Power Production Manager: He reported that crews are trying to finish up on the dike system before it snows and Knight Construction is doing the platform for the MCC structural steel fabrication for the Calispell pumps. Paul Boxleitner, Human Resources Manager: He will provide a red-lined copy of the District s Employee Wellness Policy to the Board at the October 1 meeting. Mr. Jordan explained that a section on using fitness clubs outside the county may be added to benefit those employees who live outside the county. He asked for the Board s thoughts. Discussion was held. He reported that a labor management meeting will be held on Thursday at the District s Newport office. He gave an overview of the meeting issues. He reported that next week is an Employee Wellness Event; September 24 in Newport and September 25 at Box Canyon. He explained the Unified Insurance Program Trust pays for the main body of the testing but the prostate-specific antigen screening test offered to males over 40 years of age are paid by the individual public utility district. He reported that two District employees have resigned. September 27 will be the last day for Jeff Briles, District Network Administrator, and November 1 will be the last day for Sandy Hunt, District Power Supply Manager. Robert Fritz, Community Network System Supervisor: He provided a fiber project update and reported that 812 people have signed up for service with RSPs. Crews will bring up the last three electronic hubs in the next week or so after the Dalkena river crossing is finished. Henkel s & McCoy contractors are Page 2 Minutes, September 17, 2013

3 installing electronic boxes on premises and should be done by the end of the week then the collars can be installed and people can be hooked up. Splicing will start next week. The District will meet the substantial completion of the American Recovery and Reinvestment Act Grant. Discussion was held regarding the District s lease of the fiber building. Kimberly Gentle, Enterprise Risk Manager: She provided an update on the Columbia River Treaty and reported that on Friday there was a public comment session with various entities and other breakout sessions that were closed to the public. She attended the public session, gave testimony on behalf of the District and provided an overview of the issues. She will talk with Commissioner Peterson regarding Public Power Council (PPC) meeting efforts. She attended a PPC meeting on September 5 in Portland and gave an overview of the meeting. April Owen, Assistant General Manager: She reported that Elaine Averyt, District Auditor/Customer Services Manager and Rhonda Thomas, District Director, Information Technology are attending a National Information Solutions Cooperative Conference today through Friday in St. Louis. She noted it is a good conference to attend and is helpful for the District. Sarah Holderman, Treasurer: She, Mr. Jordan and Ms. Owen attended a meeting at Box Canyon last Thursday to give a finance presentation to staff. She provided an overview of the meeting. Discussion was held regarding energy and generation gains at Box Canyon Dam. Kimberly Gentle, Enterprise Risk Manager (continued): She met with Jim Scheel, District consultant, on Monday regarding the possible use of his services. Discussion was held. Discussion was held regarding public attendandance at future Newport Board meetings from Box Canyon using District video conference capabilities. Mr. Jordan explained the revision to the District s Hanging of Event Banners Policy. He reported that no signs will be allowed to be posted on District owned infrastructure and that our contribution to community events will continue to be the hanging of banners. ACTION ITEMS: Revised Hanging of Event Banners District Policy. A motion was made by Commissioner Larson and seconded by Commissioner Peterson to approve the revised Hanging of Event Banners District Policy. The motion passed unanimously. Resolution No Metaline Falls Water System Rates. Ms. Owen explained the District s recommendation to reduce all commercial water rates for the Metaline Falls Water System. A motion was made by Commissioner Larson and seconded by Commissioner Peterson to adopt Resolution No The motion passed unanimously. COMMISSION REPORT: Commissioner Peterson attended the Northwest Power & Conservation Council meeting in Coeur d Alene on September 11. Page 3 Minutes, September 17, 2013

4 Commissioner Larson attended a Candidates Night Chamber Meeting on September 12 in Metaline Falls and reported that Pend Oreille County Sheriff Alan Botzheim commended Keith Cordes, District Line Construction Superintendent, and the District for its response when needed by the Sheriff s Department. Commissioner Knapp attended the NoaNet Board meeting on September 11 in Seattle. COMMISSION BUSINESS: Commissioner Larson will attend the Washington Public Utility Districts Association (WPUDA) meetings on September in Lake Chelan. Commissioner Peterson will attend the WPUDA Water Workshop on September in Leavenworth. Commissioner Knapp will attend the WPUDA meetings on September in Lake Chelan; a WPUDA meeting with Douglas County PUD and Grant County PUD on September 23 in Lake Chelan; a meeting with Steve Wright, Chelan County PUD General Manager, on September 24 at Chelan County PUD; and a WPUDA Water Workshop on September in Leavenworth. Selkirk Dollars for Scholars Funding Request. Discussion was held. A motion was made by Commissioner Peterson and seconded by Commissioner Larson to contribute $500 to the Selkirk Dollars for Scholars Program. This is a public relations benefit to the District and will paid from the Community Support Fund. The motion passed unanimously. BONNEVILLE POWER ADMINISTRATION BLOCK CONTRACT DISCUSSION: Ms. Owen acknowledged the work that has been done on this contract by Ms. Hunt; Loren Baker of Loren Baker Consulting; and Nancy Schimmels, BPA Account Service Manager. She highlighted the areas where Mr. Baker and Ms. Schimmels have been involved and reported that Ms. Schimmels was responsible for taking the contract to BPA for its approval. Ms. Schimmels reported this has been a great experience and project for her. Mr. Baker provided a history on the customer contracts. Ms. Owen named the entities that supported the District in the contract. Mr. Baker reported on the special provisions of the Block Contract and Ms. Owen reported this contract is an amendment to the current BPA Contract. Ms. Owen reported that Ms. Hunt has been instrumental in analyzing the BPA power products and implementing the change to Block power. Commissioner Knapp commended Ms. Hunt, Ms. Schimmels, Mr. Baker and District staff on their work efforts in amending this contract. ACTION ITEM: BPA Contract Approval. A motion was made by Commissioner Peterson and seconded by Commissioner Larson to authorize the general manager to execute the BPA Block Contract. The motion passed unanimously. Ms. Owen reviewed the cost of power the District is getting from BPA and reported it is an increase of 5-6%. Discussion was held on BPA s leadership. Following a 30-minute working lunch, the meeting resumed. METALINE FALLS WATER SYSTEM LABOR DISCUSSION: Mr. Jordan reported that staff referenced the WPUDA Sourcebook and other resources in gathering comparative information. He thanked Ms. Holderman for her work in gathering and compiling information and Mark Scott, District Water Systems Manager, for his work in benchmarking the labor data. Page 4 Minutes, September 17, 2013

5 Ms. Holderman distributed and reviewed a PUD Water Systems Operating Expense per Connection handout. Mr. Jordan noted this handout is to provide background information. Mr. Scott reviewed the bench marking on pages 5 and 6 of the handout and reported on the systems that were most comparable to the Metaline Falls Water System based on the treatment plant type and water volume. He reviewed the chemical costs. Mr. Cauchy distributed and reviewed a Metaline Falls Water System Labor Percentages per Area handout. Mr. Scott reported there are operating and maintenance situations where two watermen must be present. Mr. Jordan reported on possible goals for reducing labor. Mr. Scott reported that a customer water newsletter was mailed that addressed ways for customers to help cut costs. Mr. Jordan explained possible District s approaches to cut labor costs, if desired. Discussion was held. Mr. Jordan asked for the Board s input on granting the Town of Metaline Falls the option to purchase the water system. Discussion was held. Roger Aydelott, Member of the Metaline Falls Town Council, requested additional time so that he could meet with the other members of the town council and receive their input on the subject. This topic will be discussed again at the October 1 and 15 Board meetings. The Board thanked Mr. Aydelott for attending the discussion. Mr. Scott gave an update on the Metaline Falls Transmission Main Line Project. There being no further discussion to come before the Board, the meeting adjourned at 1:29 p.m. ATTEST: President Secretary General Counsel Page 5 Minutes, September 17, 2013