PUBLIC UTILITY DISTRICT NO. 1 of Jefferson County

February 16, 2011 REGULAR MEETING

MINUTES

CALL TO ORDER 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 5:01 p.m. at the District Office, 230 Chimacum Road, Port Hadlock, Washington. Commissioners and staff present were:

Ken McMillen, President Barney Burke, Vice-President

Wayne King, Secretary James Parker, District Manager

Bill Graham, District Resource Manager Kate Pike, Brisa Services

AGENDA The Agenda was approved as submitted.

APPROVAL OF MINUTES MOTION: By Commissioner King, Second by Commissioner Burke, carried unanimously, to approve the Regular Meeting Minutes of February 2, 2011.

APPROVAL OF VOUCHERS MOTION: By Commissioner Burke, Second by Commissioner King, carried unanimously to approve payment of: Warrants No.17107 through 117118 in the amount of $ 20,127.56; and Warrants No.17119 through 17122 in the amount of $ 14,311.97; and Warrants No.17123 through 17151 in the amount of $ 23,004.34;

For a Total Amount of $ 62,443.87

ITEMS FROM THE FLOOR (not listed on the Agenda) Mr. and Mrs Paul (Elizabeth)Toomey addressed the Board regarding installation of a fence along a property line near the PUD waterline and on the PUD easement. After discussion the Board took the following ACTION: MOTION: By Commissioner King, Second by Commissioner Burke, carried unanimously, to approve installation of a fence by the Toomeys along their property line, on the PUD waterline easement, with oversight by PUD staff. After discussion of the Toomey's need for an annual septic inspection prior to issuance of a building permit and the question of a certificated inspector on staff, it was determined that the Manager will further investigate.

COMMISSIONER'S REPORTS Commissioner King February 3: Attended meeting of the Quilcene Economic Development Committee presented by Team Jefferson. February 8 & 9: With PSE staff, inspected facilities with Karl Karzmar, Mike McGinnis, Larry Stokey and others. February 15: Inspected improvements at Peterson Lake. February 26: Expect to attend meeting of "Quilcene Conversation" in Quilcene. February 23: Expect to attend Puget Sound Energy Transition Team meeting. Commissioner Burke February 11: Attended a Local 20/20 meeting at the Northwest Maritime Center regarding alternative energies. February 15: Attended a meeting at Washington State University Extension on the State broadband service. February 17: Expect to attend meeting of Soroptomist International of Port Townsend. February 18: Expect to lunch with Frank Needham and Katherine Baril regarding

NoaNet service. Commissioner McMillen February 17 & 18: Expect to attend WPUDA meetings in Olympia.

ACTION ITEMS a) State Revolving Fund loan The Manager presented documents relating to the Drinking Water State Revolving Fund, including correspondence, contract copies, attorney's certification, a contract face sheet, EPA form regarding suspension, debarment or ineligibility and EPA compliance review report, and Taxpayer ID number and certification request. After discussion the Board took the following ACTION: MOTION: By Commissioner Burke, Second by Commissioner King, carried unanimously, to authorize the Board President to sign the contract and to authorize the Manager to execute and have executed the other appropriate documents. b) WRIA 17 Interlocal agreement with Jefferson County-Water Supply Study Bill Graham presented a proposed Interlocal Agreement between Jefferson County PUD #1 and Jefferson County providing for development by the PUD of a report supplementing the Water Supply, Demand and Availability Analysis for Water Resource Inventory Area (WRIA) 17 (Analysis). The East Jefferson Watershed Council (formerly WRIA 17 Planning Unit) will select a contractor to develop population-based water demand projections for the years 2016 and 2030 and the PUD will prepare a short report as an appendix to the original Analysis. After discussion the Board took the following ACTION: MOTION: By Commissioner Burke, Second by Commissioner King, carried unanimously to approve execution of the Interlocal Agreement between Jefferson County PUD #1 and Jefferson County providing for development by the PUD of a report supplementing the Water Supply, Demand and Availability Analysis for Water Resource Inventory Area (WRIA) 17.

DISCUSSION ITEMS a) Noanet Agreement Mike Henson, Chief Security of NoaNet, has requested a meeting to work toward finalization of an Interlocal Agreement. Bill Graham recommends that Mr. Hanson, Commissioner Burke and he attempt to finalize a draft agreement and that Mr. Henson attend the next PUD Board of Commissioners meeting and provide as much detailed information on the Jefferson County network as possible. b) Peterson Lake caretaker The Manager presented for review correspondence to the Laborers Local 252 Union representatives, an agreement for caretaking services at Peterson Lake facility, and a list of repairs and enhancements for that facility. After discussion the Manager was directed to pursue any legal or union considerations and have the Resource Manager review the repair list and obtain bids.

MANAGER'S REPORT/OLD BUSINESS Indian Island: Visitation from U.S. Navy, Indian Island, staff to address meter placement. No determination. Archeologist to begin study. When plan is received, permission to work in the right-of-way will be requested from Department of Transportation and the U.S. Navy. A survey of the route may become necessary. Power Authority: The Manager presented a thorough update on the transition of electrical power from Puget Sound Energy to the PUD. He addressed project energy and demands with Bonneville Power Authority, requested additional load by Port Townsend Paper Company, and the Residential Exchange Program proposal. There is to be a Special Meeting with legal counsel on February 22, 2011, 12:00 noon at the District Office to discuss these issues.

A systems evaluation was conducted on February 8 and 9,2011 with Brown & Kysar, Inc. addressing all substations. After address of the underground utility portions, it is expected that, with inclusion of PSE information, an engineering evaluation can be completed.

Preparation of an application for Rural Utilities Service (RUS) continues. The Utilities & Transportation Commission has approved the sale/transfer. The Manager presented a draft press release to be submitted to The Leader and the Peninsula Daily News publications.

Sahara Water System Extension: Work by Seton Construction is expected to begin in May. Staff is providing sample information. Sparling Well: CH2M Hill is preparing contract for completion. Septic design is pending. Peterson Lake: See Discussion Item b) above.

PUBLIC COMMENT None

CORRESPONDENCE None

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

_ _ 16411*i Kenne A. McMillen, President

Barney Bur , Vice President