SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT

Regular Meeting August 13, 2019

The Regular Meeting was convened by President Sidney Logan at 9:00 a.m. in the Commission Meeting Room. Those attending were Tanya Olson, Vice-President; Rebecca Wolfe, Secretary; CEO/General Manager John Haarlow; Acting General Counsel Joe Fina; Assistant General Managers Pam Baley, Tom DeBoer, Glenn McPherson, Guy Payne; and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Commission & Executive Services Director Melissa Collins; and Deputy Clerks of the Board Allison Morrison and Lela Wall.

* Items Taken Out of Order **Non-Agenda Items

** A moment of silence was observed in honor of District employee Mike Brix.

1. CEO/GENERAL MANAGER BRIEFING AND STUDY SESSION

A. Updates

1. Media. Communications & Marketing Director Julee Cunningham reported on District related news and articles. Ms. Cunningham received suggestions from the Board related to the District's monthly column in the Everett Herald, and possibly expanding the column to other local publications. Also mentioned was the District's annual booth at the Evergreen State Fair.

2. Community Engagement. Senior Environmental Coordinator Dawn Presler provided a presentation at places, by reference made a part of the packet, and spoke about the recent Hydropower events at the Spada Lake Reservoir.

3. Other. Assistant General Manager Generation, Power, Rates & Transmission Management Tom DeBoer mentioned that additional funding was needed for the Jackson Power House roof replacement, noting an unanticipated need to purchase an alternate coating. The next step was for a change order of approval to be brought back at an upcoming Commission meeting.

B. Debt Management Opportunities

Senior Manager, Treasury, Risk Management & Supply Chain Jim Herrling gave a briefing on three debt management opportunities that involved the District's 2006 Water Bonds, 2009 Water Bonds, and Generation System Bonds.

Staff's recommendation and next steps included using the Operating Reserves to retire the 2006 Water System bonds, issuing refunding bonds to refinance the 2009 Water System Bonds, and applying the excess Debt Service Reserve Fund (DSRF) to the 2019 principal

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payment on the 201 0A Generation System Bonds. The request to obtain Commission approval to circulate the preliminary official statement was scheduled for October 2019.

C. Snohomish County PUD and Frontier Communications Inc., Joint Pole Agreement Extension

Manager Joint Use & Permits Moe Nave provided background and the proposed amendment information for a Joint Pole Agreement Extension between the District and Frontier Communications Inc.

Staffs proposed Amendment 3 would extend the contract term until September 30, 2020, with an option to add 1-5 years. The proposed contract language had been reviewed by Frontier, who had signed and returned the contract. The next step was to return to the Board on August 27, 2019, for approval of the Resolution.

D. Regional Planning Organization (RPO) Update

Senior Manager Transmission Management/NERC Compliance Officer John Martinsen provided a presentation on the 2020 ColumbiaGrid and Northern Tier Transmission Group (NTTG) transition into the RPO association called NorthernGrid.

The meeting recessed at 10: 11 a.m. and reconvened at 10:20 a.m.

E. North County and Modular Data Center Update

Senior Project Manager Doug Wilson and Senior Manager ITS Information Technology Operations Chris Thorpe provided an update on additional development projects planned for the District's 26-acre North County site located in Arlington, Washington, to include the purchase of a factory built Modular Data Center (Data Center).

A proposal to purchase equipment that would work as the Data Center would be presented for Board approval at the August 27, 2019, Commission meeting. A separate Public Works contract was planned for late 2019, and the installation was expected in 2020. The Local Office construction would start in the spring of 2021, with an anticipated move in date during 2023.

The meeting recessed at 10:48 a.m.

RECONVENE REGULAR MEETING

The Regular Meeting was reconvened by President Sidney Logan at 1:30 p.m. in the Commission Meeting Room. Those attending were Tanya Olson, Vice President; Rebecca Wolfe, Secretary; CEO/General Manager John Haarlow; Acting General Counsel Joe Fina; Assistant General Managers Pam Baley, Tom DeBoer, Glenn McPherson, Guy Payne; and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Commission & Executive Services Director Melissa Collins; and Deputy Clerks of the Board Allison Morrison and Lela Wall.

Regular Meeting

* Items Taken Out of Order **Non-Agenda Items

2. RECOGNITION/DECLARATIONS

3

A. Employee of the Month for August - Ramona Marino

Ramona Marino was recognized as Employee of the Month for August.

3. COMMENTS FROM THE PUBLIC

August 13, 2019

James Deal, Lynnwood, provided a handout at places, by reference made a part of the packet, and spoke in opposition of Smart Meters.

At Commissioner Wolfe's request, Mr. Deal said that he would provide a list of his concerns for staff to respond to and CEO/General Manager John Haarlow confirmed the Board would receive copies of staff's response.

4. CONSENT AGENDA

A. Approval of Minutes for the Regular Meeting of July 23, 2019

B. Bid Awards, Professional Services Contracts and Amendments

Public Works Contract Award Recommendations Over $25,000: Request for Proposal No. Doc1853015964 with Titan Electric, Inc. dba Titan Electric Contracting, Inc. Formal Bid Award Recommendations $60,000 and Over: Request for Quotation No. Doc1831978348 with United Rentals (North America) Inc. Request for Quotation No. Doc1853229116 with TechPower Solutions, Inc. Professional Services Contract Award Recommendations $200,000 and Over: None Miscellaneous Contract Award Recommendations $200,000 and Over: None Cooperative Purchase Recommendations: Contracts: None Amendments: None Sole Source Purchase Recommendations: None Emergency Declarations, Purchases and Public Works Contracts: None Purchases Involving Special Facilities or Market Condition Recommendations: None

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Formal Bid and Contract Amendments: Miscellaneous Contract No. 76965 with Benefitfocus.com, Inc. Professional Services Contract No. CW2221191 with Law Dawgs, Inc. Miscellaneous Contract No. CW2230424 with Total Landscape Corporation Contract Acceptance Recommendations: None

C. Consideration of Certification/Ratification and Approval of District Checks and Vouchers

A motion unanimously passed approving Agenda Items 4A-Approval of Minutes for the Regular Meeting of July 23, 2019; 4B -Bid Awards, Professional Services Contracts and Amendments; and 4C - Certification/Ratification and Approval of District Checks and Vouchers.

5. PUBLIC HEARING AND ACTION

A. Consideration of a Resolution Declaring Surplus an Option to Purchase the Historic Zahler Property held by Public Utility District No. 1 of Snohomish County, Approving the Assignment of the Option to the Mt. Index River Sites Community Club, Inc., and Approving Amendment No. 1 to the Cost Sharing Agreement Between the District and the Mt. Index River Sites Community Club, Inc.

Commissioner Wolfe made a motion to amend the resolution, as revised by staff, to include the date the preliminary permit was terminated.

President Logan opened the public hearing.

An amended coversheet and page two of the resolution were provided at places, by reference made a part of the packet.

The following member of the public commented on the historic Zahler property resolution:

Lora Cox, Gold Bar, supported the Resolution, as a member of the Mt. Index River Sites Community Club.

There being no further questions or comments from the public, the public hearing was closed.

A motion unanimously passed approving Resolution No. 5913, as amended, declaring surplus an option to purchase the historic Zahler property held by Public Utility District No. 1 of Snohomish County, approving the assignment of the option to the Mt. Index River Sites Community Club, Inc., and approving Amendment No. 1 to the Cost Sharing Agreement between the District and the Mt. Index River Sites Community Club, Inc.

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6. ITEMS FOR INDIVIDUAL CONSIDERATION

A. Consideration of a Motion Accepting the 2nd Quarter 2019 Financial Conditions and Activities Monitoring Report

Senior Manager Controller & Auditor Julia Anderson provided the 2nd Quarter 2019 Financial and Budget Results for the District's Electric System and Water System.

CEO/General Manager John Haarlow and Assistant General Manager Generation, Power, Rates & Transmission Management Tom DeBoer responded to questions about mitigating revenue and expense variances.

A brief technical difficulty occurred in the audio recording at 2: 14 p.m.

A motion unanimously passed accepting the 2nd Quarter 2019 Financial Conditions and Activities Monitoring Report.

B. Consideration of a Resolution Authorizing the CEO/General Manager to Execute an Amendment of an Easement Previously Granted Between the District and the State of Washington Department of Natural Resources as Part of an Exchange of Real Property in the Sultan Basin and Williamson Creek Areas

A motion unanimously passed approving Resolution No. 5914 authorizing the CEO/General Manager to execute an amendment of an easement previously granted between the District and the State of Washington Department of Natural Resources as part of an exchange of real property in the Sultan Basin and Williamson Creek areas.

C. Consideration of a Resolution Authorizing the CEO/General Manager or His Designee to Execute a Contract with the City of Seattle, City Light Department for Provision of Third Party Operating Reserve Services as Permitted Under the District's Transmission Contract with Bonneville Power Administration

A motion unanimously passed approving Resolution No. 5915 authorizing the CEO/General Manager or His Designee to execute a contract with the City of Seattle, City Light Department for provision of third party operating reserve services as permitted under the District's Transmission Contract with Bonneville Power Administration.

D. Consideration of a Resolution Authorizing the Manager, Real Estate Services, to Execute an Easement Renewal of an Easement Previously Granted by the District in Favor of the City of Everett that Allows the City to Operate, Repair, and Maintain a Recreational Trail in a Portion of the Power Line Corridor Property of the District Commonly Known as the PNT Right-of-Way Located in the City of Everett, Snohomish County, Washington

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A motion unanimously passed approving Resolution No. 5916 authorizing the Manager, Real Estate Services, to execute an easement renewal of an easement previously granted by the District in favor of the City of Everett that allows the City to operate, repair, and maintain a recreational trail in a portion of the Power Line Corridor property of the District commonly known as the PNT Right-of-Way located in the City of Everett, Snohomish County, Washington.

7. COMMISSION BUSINESS

A. Commission Reports

Commissioner Wolfe reported on her attendance at a recent Energy Northwest (ENW) meeting in Pasco, Washington, which included a tour of the Columbia Generating Station. Ms. Wolfe mentioned an ENW workshop that she was invited to attend in Chelan, Washington. A brief discussion followed about non-Executive Board members attending the ENW Annual Board Retreat, which included the workshop.

Commissioner Olson represented the Board at the District's New Employee Orientation [referred to by Ms. Olson as the Employee of the Month] and at the Jackson Hydro Water Temperature Conditioning Project Celebration.

Commissioner Logan reported on an electric vehicle charging presentation that was shown during the recent Pacific Northwest Utilities Conference Committee (PNUCC) meeting in Portland, Oregon.

Mr. Logan began a conversation about the Washington Public Utility Districts Association (WPUDA) and asked CEO/General Manager John Haar low if staff would provide the pluses and minuses on the District joining that organization. The rest of the Board concurred.

A discussion ensued about the Board's 2020 budget, which included travel and education expenses toward the Public Power Council (PPC), PNUCC, and ENW meetings. The majority of the Board voiced that it was important to keep within budget. When Ms. Olson mentioned that PPC provided extensive meeting packets, Ms. Wolfe rescinded her request to attend PPC meetings; however, the Board decided that Ms. Wolfe would attend ENW when an alternate was needed and mentioned the possibility of switching around PPC attendees.

Obtaining a subscription to Energywire, an E&E News online publication was mentioned and due to the publication's prohibitive cost, Commission & Executive Services Director Melissa Collins would see if sample articles could be reviewed before a subscription decision was made.

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B. Commission Broadcast Update

Senior Business Analyst Tom Halsted presented statistical data from the District's internal and external websites, and broadcasting survey results collected from surrounding municipalities and utilities.

Following a discussion of estimated live broadcasting usage versus cost, including the current accessibility of meeting information, the Board agreed that external broadcasting would not be pursued further at this time.

8. GOVERNANCE PLANNING

A. Governance Planning Calendar

The Customer Experience Workshop was moved to October 29, 2019. A date was to be determined for a Board Workshop to review Board Policies.

CEO/General Manager John Haarlow mentioned that PPC Executive Director Scott Simms and PPC staff would provide a presentation on ENW at an upcoming Commission meeting, tentatively scheduled for September 24, 2019.

On August 14, 2019, Commissioner Logan, Commissioner Wolfe, and other District staff were going on a site visit of the Hancock Creek and Calligan Creek Hydroelectric Projects, near North Bend, Washington.

ADJOURNMENT

There being no further business or discussion to come before the Board, the Regular Meeting of August 13, 2019, adjourned at 3:07 p.m. An audio file of the meeting is on file in the Commission Office and available for review.

Approved this 27th day of August 2019.