PUBLIC UTILITY DISTRICT NO. 1 of Jefferson County

July 2, 2013 REGULAR MEETING

MINUTES

The Regular Meeting of the Public Utility District No.1 of Jefferson County was called to order by the President of the Board of Commissioners at 5:00 p.m. at the District Office, 230 Chimacum Road, Port Hadlock, Washington. Commissioners and staff present were:

Barney Burke, President Wayne King, Vice-President

Ken McMillen, Secretary James Parker, District Manager

Bill Graham, District Resource Manager Michael Legarsky, District Finance Director

Kevin Streett, District Electrical Superintendent Don McDaniel, Transition Consultant

Kate Pike, Brisa Services

AGENDA The Agenda was approved as submitted.

APPROVAL OF MINUTES MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to approve the Regular Meeting Minutes of June 18, 2013.

APPROVAL OF VOUCHERS MOTION: By Commissioner King, Second by Commissioner McMillen, carried unanimously, to approve payment of:

Warrants No. 500426 through 500454 in the amount of $ 50,481.44

Warrants No. 101024 through 101112 in the amount of $ 788,004.05

Warrants No. 101113 through 101118 in the amount of $ 119,651.28

For a Total Warrant Amount of 958,136.77

Wire Transfer Payments $ 1,353,129.87 COMMISSIONERS REPORTS Commissioner McMillen June 26-27: Attended WPUDA Energy Committee and Water Committee meetings. Commissioner King June 25: Attended Clallam County PUD rate hearing. July 1: Attended, with James Parker and Don McDaniel, the final Transition Advisory Committee with Puget Sound Energy. Commissioner Burke

June 27: Attended meeting of Peninsula Development District.

PUBLIC COMMENT (for items not listed on the Agenda) 1. Stan Nealey, citizen and Citizen Advisory Board member, noted a need for grass trim at Quilcene substation. 2. Tom Thiersch, citizen, inquired what the District bill paying privacy policy entailed. Staff will address.

ACTION ITEMS a) Logo Selection Fifteen logo presentations were submitted for review by the Board. After reducing choices to three, the Board took the following ACTION: MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, the Board chose logo presentation K, using a water drip inside the letter "P" and a "traditional" incandescent lightbulb inside the letter "D" and removing "#1". b) Sparling Bid Award The Manager presented the Sparling Treatment Bid Phase 2 results of five bids, all of which were significantly higher than the engineering estimate. Additionally, he noted that issuance of Public Works Trust Fund (PWTF) loans for 2014 will not occur. Without PWTF low-interest loans, the District cannot pay for the project. Consequently, the Manager recommended not awarding a Phase 2 bid at this time. After discussion the Board took the following ACTION: MOTION: By Commissioner McMillen„ Second by Commissioner King, carried unanimously, to support the recommendation of the Manager and reject at this time all bids for the Sparling Treatment Bid Phase 2 project. c) ATEC - Kala Point The Manager presented memorandum regarding staff having to manually run the water filtration system at Kala Point and recommending purchase of ATEC Systems water filtration systems. After discussion the Board took the following ACTION: MOTION: By Commissioner King, Second by Commissioner McMillen, carried unanimously, the Board authorized purchase of two ATEC Systems water filtration systems for the Kala Point facility.

DISCUSSION ITEMS a) Rates/Charges The Manager noted that the billing cycle is now on a regular schedule. There was some discussion regarding "back due" notices being sent to PUD customers from the former electric power provider Puget Sound Energy. Regarding the PUD service termination (shut-off) policy, the Board discussed some measures of leniency, as in setting up a budget plan. Also, the Board discussed the deposit policy for customers and took the following ACTION: MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to change the current policy and permit long-time (over 2 years) on-time water customers who may be "red flagged" for former electricity service to be exempt from having to pay a deposit for electric service. b) PSE Price Adjustments The Manager, Commissioner King and Transition Consultant Don McDaniel attended the final Transition Advisory Committee meeting with Puget

Barney urke, President

\nneth a. McMillen, Secret-ary

Sound Energy Corp. (PSE). PSE agreed to drop some charges to the PUD, and agreed to provide missing work orders. c) Pole Attachments The Manager presented information on banner attachments previously permitted by PSE. As discussion addressed current banners attached regarding the Port Townsend Carnegie Library rebuild, and as Commissioner Burke had supported the rebuild issue, he recused himself from the discussion. After brief discussion, it was decided to leave banners in place until after the current election and permit nothing further until after the Board has set a policy. d) Power Boost OLY CAP - LIHAEP Agreement The Manager presented information regarding the Olympic Community Action Programs (OLYCAP) Low-Income Home Energy Assistance Program (LIHAEP). An agreement for use of these funds by the PUD has been signed. Low income disabled and senior citizen programs are in place and low income isolation programs can be supported. Agreement with OLYCAP for power boost fund is yet to be developed. Information regarding policy and procedure regarding OLYCAP's Energy Smart Grocer, Energy Smart Industrial, and low-income weatherization programs was presented, as well a sample agreement between OLYCAP and Mason County PUD No. 1

MANAGER'S REPORT/OLD BUSINESS Electrical Summary The Electrical Superintendent and staff continues addressing work orders, equipment replacement, hirings, dispatching, the Magnum project on Beaver Valley Road and transformers in Port Ludlow. The Electrical Superintendent noted Labor & Industry issues for work or repairs beyond "primary meters" which include local school campuses and State Parks. Concerning the issue of franchising, Clallam County PUD submitted information on its customer service, emergency response plan and integrated vegetation management plan. An agreement between the Jefferson County PUD and the Port Townsend Paper Corporation has been signed. Citizen Advisory Board Two facilities tours with CAB members were held. The July 1 meeting was postponed.

CORRESPONDENCE None

ADJOURNMENT MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to adjourn the Regular Meeting at 7:11 p

King, Vice sident ayne