PUBLIC UTILITY DISTRICT NO. 1 of Jefferson County

DRAFT May 15, 2012

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

Kate Pike, Brisa Services

AGENDA The Agenda was approved with the addition of an Executive Session to discuss purchase negotiations, deletion of Action Item b) Price adjustments-power, and the addition of Discussion Item d) Landscaping.

APPROVAL OF MINUTES MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to approve the Regular Meeting Minutes of May 1, 2012.

APPROVAL OF VOUCHERS MOTION: By Commissioner King, Second by Commissioner McMillen, carried unanimously, to approve payment of: Warrants No.18629 through 18633 in the amount of $ 15,399.63; and Warrants No.18634 through 18649 in the amount of $ 24,750.37; and Warrants No.18650 through 18691 in the amount of $ 164,799.60

For a Total Amount of $204,949.60

COMMISSIONER'S REPORTS Commissioner King May 15: Attended luncheon presentation by Power Trip Energy. May 16: Expect to attend memorial service for Karl Karzmar. May 29: May attend meeting regarding broadband provision. Commissioner Burke May 4: Attended meeting of Local 20/20 in Port Townsend. May 10: Attended meeting of City of Port Townsend sub-committee regarding broadband. May 15: Attended luncheon presentation by Power Trip Energy. May 16: Expect to attend memorial service for Karl Karzmar. May 16: Expect to attend meeting of climate change committee with City of Port Townsend and Jefferson County. May 24: Expect to attend meeting of the Peninsula Development District. Commissioner McMillen May 9: Attended WPUDA Annual Business Meeting.

MANAGER REPORT - electrical power transition update The Manager presented a summary of total costs of $1,494,564. Costs for lawsuit relative to Peterson Lake is $190,809.10.

He also presented correspondence from Puget Sound Energy Contract Services outlining alternatives for upgrading Coyle distribution system, as well as correspondence regarding possible takeover of the Quilcene Substation transmission line. With regard to financing, documents are being prepared to execute the approved RUS loan. New accounting system is being implemented. The next Transition Advisory Committee is scheduled for May 24, 2012.

ITEMS FROM THE FLOOR (not listed on the Agenda) 1. Bill Wise expressed concerns and questions about conservation energy loans by Puget Sound Energy and their re-payment and about connection charges. 2. Ned Schumann expressed concerns about the franchising process with NoaNet.

G ing, Vice Pre

ACTION ITEMS Sparling Well Bid The Manager presented a listing of bids received for the Sparling Water Treatment Plant construction, as well as correspondence regarding a Public Works Trust Fund construction loan application. After brief discussion the Board took the following ACTION: MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to reject the current low bid.

DISCUSSION ITEMS a) NoaNet BTOP project update The Manager presented pricing information from NoaNet for Jefferson County telecommunication services. b) Shortlist of Bill Payment contractors Staff plans to publish Requests for Proposals for customer payment services. c) Water District No. 3 The Manager presented a memo for record regarding possibilities of financing for any rebuilding or acquisition projects. d) Landscaping After brief discussion regarding a need for landscaping improvements at District office, the Board took the following ACTION: MOTION: By Commissioner King, Second by Commissioner McMillen, carried unanimously, to authorize staff to spend up to $1,000 for landscaping assistance.

MANAGER'S REPORT/OLD BUSINESS Indian Island: Regarding the water transmission line to Marrowstone Island, construction/boring is approximately three-fourths completed. Some unforeseen conditions have been encountered causing delay and additional expense. Seton Construction is to be awarded contract for placement of pressure reducing station. Mumby Road extension is to begin. Sparling Well: See Action Item above. Telecom: The Jefferson County Board of Commissioners, as requested by the PUD, has revised a draft franchise agreement. (As can be inferred by the date of the hearing, said agreement was not yet approved.)

PUBLIC COMMENT None

CORRESPONDENCE Letter from Beckett Point Fishermen's Club regarding its Large Onsite Sewer System loans.

EXECUTIVE SESSION MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to adjourn the Regular Meeting to Executive Session at 7:44 p.m for the purpose of discussing a possible offer to buy a water system. The Executive Session was adjourned at 8:15 p.m. The Board took the following ACTION: MOTION: By Commissioner McMillen, Second by Commissioner King, carried unanimously, to authorize the Manager to make a purchase offer to the owner of the Kala Point Water System.

ADJOURNMENT

MOTION: By Commissioner King, Second by Commissioner McMillen, carried unanimously, to adjourn the Regular Meeting at 8:20 p.m.

Barney Burke, President

L9-kg Kenneth A. McMillen, Secretary