July 26, 2011

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 Commissioner Mike Murphy, Commissioner Jeff McClure and Legal Counsel Rich Davis. Staff: Steve Jilk, General Manager; Ann Grimm, Administrative Assistant; Brian Walters, Director of Utility Operations; Barb Shosten, Director of Finance; Annette Smith, Assistant Finance Director; Dennis Yabsley, Electric System Supervisor; Fred Disch, Water Systems Supervisor; Mike Macomber, IT/SCADA Technician; Duane Holden, Director of Engineering and Project Development; Rebecca Schlotterback, Water Resource Technician; and Lew Gaskill, Accountant 1. Public attending: Rick Maricle, ConocoPhillips; and Tom Perry, MSA.

• Public Comment
No comments made.

• Approval of the Meeting Minutes and Claims
The Commissioners were presented with the minutes of the regular meeting held July 12, 2011, and the following claims of July 26, 2011.

ACTION: Commissioner Murphy motioned to approve the minutes of the regular meeting held July 14, 2011, and the claims of July 26, 2011. Commissioner McClure second the motion. Motion passed unanimously.

• Award of Bid: Plant No. 1 North Settling Pond Cleaning Project
Background: The District has developed a Capital Improvement Project list for work to be completed in 2011. On this list is the cleaning & excavation of the District's Plant No. 1 North Settling Pond (RW-M-2). Due to the significant amount of sediment the clarification process produces, the settling ponds need to be cleaned and excavated, on an annual basis.

On July 14, 2011 the District received and publicly read aloud six (6) bids submitted for this project. The results are as follows:

Boss Construction, Inc. has correctly completed and included all of the required bid forms.

The total amount of their bid is less than the engineer's estimate. Colacurcio Brothers Construction failed to include the required Non-Collusion Affidavit in their bid packet; therefore their bid was determined non-responsive.

Staff's recommendation is to accept Boss Construction Inc's bid proposal as the lowest cost responsive bid for the total cost not to exceed $31,087.30. There is no fiscal impact as this work is included in the 2011 Capital Improvement Plan and 2011.

ACTION: Commissioner McClure motioned to award the bid to Boss Construction, Inc. in the amount of $31,087.30 and authorize the General Manager to sign and execute the contract for the 2011-Plant No. 1 North Settling Pond Cleaning Project. Commissioner Murphy second the motion. Motion passed unanimously.

• Award of Bid: 115kV Transmission Line Vegetation Management
Background: Whatcom PUD has developed a Capital Improvement Project list for work to be completed in 2011. On this list is the 115 kV Transmission Line Vegetation Management Project (E-M-1). An evaluation of the hazard trees was completed and several trees were identified for removal, the identification and removal of hazard trees will be continued on an annual basis.

On July 14, 2011 the District received and publicly read aloud two (2) bids submitted for this project. The results are as follows:

The above totals include Washington State Sales Tax

Kemp West, Inc. has correctly completed and included all of the required bid forms. The total amount of their bid is less than the engineer's estimate. Asplundh Tree Experts failed to include the required Non-Collusion Affidavit in their bid packet. Therefore, their bid was determined to be non-responsive.

Staff's recommendation is to accept Kemp West, Inc's bid proposal as the lowest cost responsive bid for the total cost not to exceed $59,774.82. There is no fiscal impact as this work is included in the 2011 Capital Improvement Plan and included in the 2011 budget.

ACTION: Commissioner McClure motioned to award the bid to Kemp West, Inc. in the amount of $59,774.82 and authorize the General Manager to sign and execute the contract for the 2011-115 kV Transmission Line Vegetation Management Project. Commissioner Murphy second the motion. Motion passed unanimously.

• Approve Revision No. 1 to Exhibit D of the Bonneville Power Administration (BPA) Regional Dialog Power Sales Agreement
Background: For the past several years, the District has scheduled the delivery of BPA power supply over Puget Sound Energy (PSE) facilities for use at its Water Treatment Plants No. 1 and 2. Once the District completes construction of a new 115 kV line along Imhoff Road and then cuts over service from PSE's facilities to the District owned facilities, District staff will no longer have to schedule power supply deliveries for Water Plant No. 1.

Revision No. 1 reflects this change in power supply delivery points and scheduling requirements. Should the cut-over from PSE facilities to District owned facilities not take place prior to October 1, 2011, then Exhibit D will be revised to reflect the then current arrangements. Walters added that any line work that would need to be done, for example, if a line went down or needed maintenance, this work would be contracted out.

Staff recommends approving this revision to the Regional Dialog Power Sales Agreement with BPA. Revision No. 1 to Exhibit D will have no negative fiscal impact on the District's 2011 budget or ongoing operating costs for the District's electric system. Indirectly, the revision reflects the cutover of electric power supply delivery for Water Treatment Plant No. 1 from PSE to District electric facilities. This will result in PSE charging the District substantially less for transmission use charges, as Water Treatment Plant No. 1 will no longer be served off of PSE electric transmission facilities.

ACTION: Commissioner McClure motioned to approve Revision No. 1 to Exhibit D of the District's BPA regional Dialog Power Sales Agreement (No. 09PB-13133) and authorize the District's General Manager to sign and execute Revision No. 1. Commissioner Murphy second the motion. Motion passed unanimously.

• Manager's Report
PUD Staff BBQ
Jilk invited the Commissioners to the staff BBQ lunch on August 11, 2011.

Whatcom County Economic Development Investment (EDI) Board
The PUD has been working with other members of the WRIA1 Joint Board for some time on the development of an action plan to implement the Joint Board's Watershed Management Plan for WRIA1. Jilk said that the County EDI Board will meet on Thursday, August 11 to review the request of EDI funding for the five year action plan to implement the water supply planning request.

• There being no further business for the Regular Meeting, the Commission adjourned the regular meeting at 8:09 a.m.

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Secretary/ Commissioner

Commissioner