SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT

Regular Meeting May 29, 2018

The Regular Meeting was convened by President Kathleen Vaughn at 9:00 a.m. in the Commission Meeting Room. Those attending were Sidney Logan, Vice President; Tanya Olson, Secretary; CEO/General Manager Craig Collar; General Counsel Anne Spangler; Assistant General Managers Tom DeBoer, John Haarlow, Glenn McPherson, James West, and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Clerk of the Board Melissa Collins and Deputy Clerk of the Board Lela Wall.

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

1. CEO/GENERAL MANAGER BRIEFING AND STUDY SESSION

A. Updates

1. Media. Communications & Marketing Director Julee Cunningham reported on District related articles and shared a video segment of District trucks, which Commissioner Olson suggested be shown at the District's (Evergreen State) fair booth.

2. Community Engagement. Senior Executive Account Manager Chuck Peterson provided a handout at places, by reference made a part of the packet. The document was an example of the maintained significant information for critical facilities. Mr. Peterson responded to Board questions regarding distribution and updating of information, and the timeframe for restoring power to those customers.

3. Other. There were no other updates.

B. Initiative 1631 - Protect Washington Act

General Counsel Anne Spangler and State Government and External Affairs Associate Clark Mclsaac presented the first in a series of related discussions of Initiative 1631. The agenda included who the sponsors were; what was in the initiative; what were the impacts to the District; requirements for the ballot and timeline; and limitations on participation.

Ms. Spangler answered utility related questions and agreed to bring back further details regarding Commissioner Vaughn's question about the created terminology of the Pollution and Health Action Areas.

A follow-up presentation, to include how the Initiative would affect the District, was being prepared to come before the Board by the beginning of July.

The meeting recessed at 10:05 a.m. and reconvened at 10: 17 a.m.

Regular Meeting 2 May 29, 2018

C. Short-Term Power Transactions

Short-Term Power Trader Mike Shapley provided a brief overview of the District's short-term power energy transaction process, defined as next day through thirty months and having the number one priority of serving customer load.

Discussion ensued regarding the background and whether Columbia was in both, the Block and the Slice, portions of the Bonneville Power Administration's (BPA) resource mix, to which Mr. Shapley said he would confirm and provide that information to the Board.

D. Energy Efficiency for Indoor Agriculture Update

Senior Manager Energy Services George Pohndorf and Assistant General Counsel Paul McMurray provided a summary of the program status, legal issues, and next steps for Energy Efficiency (EE), with respect to indoor agriculture.

Conclusions were that there is a great deal of growth occurring in this sector and Federal law enforcement efforts in Western Washington will continue to not focus on businesses operating in accordance with state law. Discussion included bill payments and security for these customers, as well as questions of potential liability for the District. Mr. Pohndorf mentioned that he would provide the Board with a New York Times article regarding the banking industry's creative responses to serving these businesses. Mr. Pohndorf would also try to locate a study on market load growth, in relation to the legal status of indoor agriculture.

Next steps included to proceed with re-opening the Cannabis Energy Efficiency Program in late 2018, with a focus on capacity savings, continue to serve load and connect new customers, continue to monitor legal and policy situations, and provide future updates to the Board as needed.

E. North County Local Office Update

Senior Project Manager Mark Flury presented information for a planned consolidation study of the District's North County local offices, to include a critical facilities review and a master plan update.

The goal will be to provide the Board with a data driven local office recommendation by the end of this year. Discussion included facility distance, pertaining to reliability, and customer payment methods, in the event of an office consolidation.

F. District Cash and Financial Reserves

Due to time constraints, this item was moved to the afternoon session.

Regular Meeting 3 May 29, 2018

RECONVENE REGULAR MEETING

The Regular Meeting was reconvened by President Kathleen Vaughn at 1: 30 p.m. in the Commission Meeting Room. Those attending were Sidney Logan, Vice President; Tanya Olson, Secretary; CEO/General Manager Craig Collar; General Counsel Anne Spangler; Assistant General Managers Tom DeBoer, John Haarlow, Glenn McPherson, James West and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Clerk of the Board Melissa Collins and Deputy Clerk of the Board Lela Wall.

Changes to the agenda were made as follows: Add the CEO/General Manager Briefing and Study Session item lF, from the morning session after item 2 Comments from the Public; and add an Executive Session to the end of the Regular Meeting.

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

2. COMMENTS FROM THE PUBLIC

There were no comments from the public.

*1. CEO/GENERAL MANAGER BRIEFING AND STUDY SESSION

F. District Cash and Financial Reserves

Assistant General Manager Finance & Treasurer Glenn McPherson provided a follow-up to the December discussion of the District's cash reserves to address all of the Electric System Reserves, the Generation System and Water System, and a changed risk profile.

Discussed was the need for an advanced authority of providing discretion for the CEO to create individual funds, within the Board approved reserve categories, should last minute instances occur. It was confirmed for Commissioner Olson that this advanced authority would not be for something that would affect rates.

Next steps were for resolutions to be presented for Board consideration on June 12, 2018. Resolutions will include three separate companion resolutions, with a consistent format, for each of the District's three systems. Staff would request Board approval of proposed reserve categories and the purpose and nature of the individual funds. Other resolutions would be to revise finance title designations, to have the more common structure of a separate Treasurer reporting to the position type of CFO/ AGM of Finance, and declare the Senior Manager of Treasury as the Treasurer. The Banking and Fiscal Coordinator would be designated as the Deputy Treasurer.

Regular Meeting 4 May 29, 2018

3. CONSENT AGENDA

A. Bid Awards, Professional Services Contracts and Amendments

Public Works Contract Award Recommendations Over $25,000: Request for Proposal No. Doc1315530534 with Interwest Construction, Inc. Formal Bid Award Recommendations $60,000 and Over: Request for Quotation No. Doc1282655864 with Electric Power Products, Inc. Request for Quotation No. Doc1289502756 with General Pacific, Inc., proposing GE-Alstom Request for Quotation No. Doc1301069159 with General Pacific, Inc. Professional Services Contract Award Recommendations $200,000 and Over: Professional Services Contract No. CW2233812 with The Partners Group LTD Miscellaneous Contract Award Recommendations $200,000 and Over: None Cooperative Purchase Recommendations: Contracts: Purchase Order No. 4500036908 with Global Rental Company Purchase Order Nos. 4500036925 and 4500036927 with Columbia Ford Amendments: None Sole Source Purchase Recommendations: None Emergency Declarations, Purchases and Public Works Contracts: None Purchases Involving Special Facilities or Market Condition Recommendations: None Formal Bid and Contract Amendments: Professional Services Contract No. CW2224002 with CH2M Hill Engineers, Inc. Professional Services Contract No. 61640 with EES Consulting, Inc. Miscellaneous Contract No. 65673 with ARCOS, LLC Contract Acceptance Recommendations: Public Works Contract No. CW2232893 with Kemp West, Inc.

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

A motion unanimously passed approving Agenda Item 3A - Bid Awards, Professional Services Contracts and Amendments and 3B - Certification/Ratification and Approval of District Checks and Vouchers.

Regular Meeting 5 May 29, 2018

4. ITEMS FOR INDIVIDUAL CONSIDERATION

A. Consideration of a Resolution Authorizing the CEO/General Manager or Treasurer to Purchase Insurance Coverage from Various Providers

A motion unanimously passed approving Resolution No. 5852 authorizing the CEO/General Manager or Treasurer to purchase insurance coverage from various providers.

5. COMMISSION BUSINESS

A. Commission Reports

Commissioner Logan and Commissioner Olson attended the annual Economic Alliance Awards ceremony. Mr. Logan attended the District's Customer breakfast. Commissioner Olson attended a Cyber Summit. Commissioner Vaughn telephonically attended the Northwest Public Power Association (NWPPA) meeting and reported that she was elected to a three-year term on Energy Northwest's (ENW) Participants Review Board (PRB).

B. Discussion and Possible Actions Related to the Process for Filling the Interim CEO/General Manager Position

Commissioner Vaughn began the discussion related to filling the Interim CEO/General Manager position to replace Craig Collar, who will retire on June 29, 2018, (Commissioner Vaughn said January 29). Based on prior Executive Session Board discussions of possible candidates and terms of employment for the position, Ms. Vaughn said she concluded that it would be in the best interest of the District to appoint General Counsel Anne Spangler to serve in that capacity.

A motion unanimously passed directing Assistant General Counsel Branda Andrade to prepare a resolution appointing Ms. Spangler as interim CEO/General Manager of the District, effective June 30, 2018, based on the terms and conditions Ms. Vaughn previously discussed with Ms. Spangler, for approval at the regular Board meeting scheduled for June 12, 2018.

6. GOVERNANCE PLANNING

A. Governance Planning Calendar

Commissioner Logan requested an update on the Warm Beach Water Consolidation. The Board concurred.

Regular Meeting 6 May 29, 2018

**EXECUTIVE SESSION

The Regular Meeting recessed at 2: 15 p.m., and reconvened into Executive Session at 2:21 p.m. to review the performance of a public employee, under the terms set forth in the Open Public Meetings Act. It was anticipated the Executive Session would last approximately 30 minutes, with no public announcements. Those in attendance were Commissioners Kathleen Vaughn, Sidney Logan, Tanya Olson; and Clerk of the Board Melissa Collins. The Commission immediately adjourned the Regular Meeting upon conclusion of the Executive Session.

ADJOURNMENT

There being no further business or discussion to come before the Board, the Regular Meeting of May 29, 2018, adjourned at 2:30 p.m. An audio file of the meeting is on file in the Commission Office and available for review.

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(absent)