The regular meeting of the Board of Commissioners of Public Utility District No. 1 of Whatcom County was called to order at 8:00 a.m. by Commissioner Paul Kenner. Said meeting was open to the public and notice thereof had been given as required by law. Those present included Commissioners Jeff McClure and Mike Murphy and Legal Counsel Jon Sitkin. Staff: Ann Grimm, Administrative Assistant; Brian Walters, Director of Utility Operations; Barb Shosten, Director of Finance; Annette Smith, Assistant Finance Director; Lew Gaskill, Accountant I; Fred Disch, Water Systems Supervisor; Rebecca Schlotterback, Water Resource Technician; Paul Siegmund, Process and Control Engineer; Mike Macomber, IT/SCADA Technician; Dennis Yabsley, Electric System Supervisor, and Duane Holden, Project Manager. Public attending: Rick Maricle, ConocoPhillips and Tom Perry, Murray, Smith and Associates.

• Public Comment
No comments made.

• Approval of the Meeting Minutes and Claims
The Commissioners were presented with the minutes of the regular meeting held January 25, 2011, and the following claims of February 8, 2011:

ACTION: Commissioner McClure motioned to approve the minutes of the regular meeting held January 25, 2011, and the claims of February 8, 2011. Commissioner Murphy second the motion. Motion passed unanimously.

• Approve Purchasing Policy Revision
Assistant Finance Director Annette Smith said a few updates need to be made to the District's Purchasing Policy. On November 27, 2007, the Commission initially approved a formal Purchasing Policy and since that time, occasional adjustments have been made due to RCW and internal policy changes. The current policy changes are summarized here:

• The reference to the Delegation of Powers Resolution is edited to not include the specific resolution number;
• Dollar amounts are noted to be excluding sales tax;
• General contract limits are extended to three years;
• The guidelines on contract duration now include the ability to extend the contract length beyond the standard period (three years or five years) if approved by the Commission for a defined purpose; and
• Engineering and Architectural services now include a paragraph on the use of work orders after the contract is negotiated.

Smith noted that the Commission will have to approve contract lengths on specific projects that could go beyond the five year term limit. All current District contracts with a 2-year term will now be lengthened to a 3-year term and 5-year term contracts are limited to Professional Services Agreements. Approval of the revisions to the policy has no fiscal impact to the District.

ACTION: Commissioner McClure motioned to approve the revisions to the District's Purchasing Policy. Commissioner Murphy second the motion. Motion passed unanimously.

• Approve Membership in State of Washington Purchasing Cooperative
As a member of the State of Washington Purchasing Cooperative the District has access to over 200 purchasing contracts, covering a wide variety of products and services. Through the agreement, the District has purchased vehicles, computer hardware and software, and office furniture in the past. The District has been a member of the State's Purchasing Cooperative since 2005.

Smith said last year the staff decided to not renew the contract until 2011 since no major purchases were scheduled until 2011. This year the District has budgeted for the purchase of two vehicles for the District. The estimated savings through the contracts is around $7,000. Fiscal impact to the District is the current fees of $1,000 per year. The cost will be offset in the reduced purchase amounts of budgeted vehicles to be purchased in 2011.

ACTION: Commissioner McClure motioned to approve membership in the State of Washington Purchasing Cooperative and authorize the District's General Manager to sign the agreement. Commissioner Murphy second the motion. Motion unanimously passed.

• Approve Lease Agreement for Mobile Office Unit
The District currently leases a mobile office single-wide unit from Williams Scotsman, Inc. The mobile office resides on the west side of the gravel road across from the District's administrative offices. This facility houses the District's electricians; accommodates crew and contractor meetings; provides storage space for electrical equipment & other miscellaneous items. Also, a portion of the meeting room space is utilized for testing SCADA software & equipment. The current mobile office contains no restroom or lunch area.

District staff recommends leasing a larger double-wide mobile office unit to better meet the needs of operations staff, both for the near term and during the period construction of the Water Plant No. 2 improvements occurs. Walters said the new mobile office, as configured, would provide additional office space to accommodate water operations staff when the planned upgrades to Water Plant No. 2 take place. It would have a separate room for the testing of SCADA equipment and other electrical gear. The mobile office would also contain a restroom and small lunch area.

When the new mobile office modular is delivered, District staff will move the contents of the existing unit into the new one and the existing single-wide mobile office would be returned to Williams Scotsman. The new doublewide mobile office would be sited to the east of the gravel road and north of the District's administrative offices.

The initial term of the lease is three years and may be extended depending on the completion of the Plant 2 upgrades and site improvements. Once the new maintenance shop and office facility is completed, the staff housed in the mobile office will transition into the new facility and the mobile office will be returned to Williams Scotsman.

The monthly lease rate is $750.00 and the total amount of the lease over the three year term is $39,952.00, which includes transportation, installation, and tear down by Williams Scotsman. Commissioner Kenner inquired if it made sense to lease or purchase the mobile unit. Walters said staff researched the option to buy the current mobile office; however the bigger unit is basically ready to go, needs no renovations and is ADA accessible. It is a refurbished unit. Commissioner Murphy was concerned about the associated costs to move the unit to the new site (i.e. power, water, etc.) and the cost and length of the lease. Walters said the term of the lease is locked and pricing cannot be altered. When the current mobile office lease ended, Williams Scotsman allowed the District to rent on a month-to-month basis. He added that the District is working on the scope of work for the installation.

The lease agreement will have no fiscal impact on the District. Shosten said the lease is included in the 2011 budget. The month lease rate of $750.00 is less than the 2010 lease quote used for budget purposes, which was $921.00/month.

ACTION: Commissioner Murphy motioned to approve the Lease Agreement with Williams Scotsman, Inc. and authorize the District's General Manager to sign the agreement. Commissioner McClure second the motion. Motion unanimously passed.

• Approve Amendment No. 1 for Work Order No. 5 - Harris Group, Inc.
In July 2010, the Commission approved Work Order No. 5 for Stage 2 of the development of a Comprehensive SCADA Plan. Work Order No. 5 identified Support Task No. 2, a Communications Propagation Path Study, as additional work that would only proceed if a) Harris Group Inc. (HGI) determined during the work undertaken in Work Order No. 5 that it was necessary and b) the District authorized HGI to proceed with Support Task No. 2 upon approval by the Commission.

This study will be conducted by subject matter experts to verify the best implementation method and strategy for a radio-based communication link for the SCADA network. Other communication methods have been identified as not feasible and it has been determined by HGI and the District that it is necessary to pursue Support Task No. 2. Commissioner McClure inquired if the radio-based communication is a long-term solution. Siegmund said the radios should be fairly reliable and the study will determine communication pathways and will be used as a benchmark to compare it to fiber optic cable which includes building and/or leasing the lines. Fiber optic is not financially doable in most cases because some segments are unable to tie into each other. HGI will also be upgrading the District's FCC license.

The cost for Support Task No. 2 has been estimated at $30,800, which would increase the total not to exceed cost for Work Order No. 5 to $249,568. Both of these amounts were identified in Work Order No. 5, previously approved by the Commission. Walters said the study will conclude in August.

All work related to the Comprehensive SCADA Plan is included as part of the District's Capital Improvements Program and identified as project number CIP IS-12. Since Support Task No. 2 was originally anticipated to be work that might be required to support the project, it has been included in the 2011 Budget for the District.

ACTION: Commissioner Murphy motioned to approve Amendment No. 1 to Work Order No. 5 with Harris Group Inc., and authorize the District's General Manager to sign the amendment. Commissioner McClure second the motion. Unanimously passed

• Correction to Minutes of January 25, 2011
Commissioner McClure requested that the minutes be changed to include the word "bonds" in the first sentence after "tax exempt" as noted:
Governor's Press Release
Jilk was interviewed by KGMI radio and The Bellingham Herald regarding Governor Gregoire's and WA Department of Commerce's press release authorizing nearly $100 million in tax exempt bonds in last two months of 2010 to fund local economic development, energy conservation and infrastructure projects in four counties...

ACTION: Commissioner McClure motioned to correct the minutes of January 25, 2011, under the section of Manager's Report/Governor's Press Release to include the word "bonds" Commissioner Murphy second the motion. Motion unanimously passed.

• There being no further business for the regular meeting, the Commission adjourned the regular meeting at 8:20 a.m.

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