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 Mike Murphy. Said meeting was open to the public and notice thereof had been given as required by law. Those present included Commissioner Jeff McClure via speaker phone and Legal Counsel Jon Sitkin. (McClure noted that he received and reviewed the agenda packet prior to meeting.) Staff: Steve Jilk, General Manager; Ann Grimm, Administrative Assistant; Brian Walters, Director of Utility Operations; Rebecca Schlotterback, Water Resource Technician; Barbara Shosten, Director of Finance; Dennis Yabsley, Electric System Supervisor; Fred Disch, Water System Supervisor; Paul Siegmund, Process Engineer; Mike Macomber, IT/SCADA Technician; Duane Holden, Director of Engineering and Project Development; Alec Strand, Project Manager; and Lew Gaskill, Accountant 1. 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 September 27, 2011 and the following claims of October 11, 2011.

ACTION: Commissioner McClure motioned to approve the Minutes of September 27, 2011 and the claims of October 11, 2011. Commissioner Murphy second the motion. Motion passed unanimously.

• Regular Commission Meeting Date Change
Jilk requested a change for the 2012 budget calendar/process. The first Draft 2012 Budget originally scheduled for Commission presentation on October 25, 2011 will be moved to November 8, 2011 and the second meeting in November will be moved out one week until November 29. The Public Hearing Date will not be changed. Jilk added that the October 25 regular commission meeting will include an informational discussion regarding the water system and the possibility of an Executive Session pertaining to water rights litigation.

ACTION: Commissioner McClure motioned to approve the date change of the Draft 2012 Budget presentation from October 25, 2011 to November 8, 2011; and, the date change of the Regular Meeting from November 22, 2011 to November 29, 2011. Commissioner Murphy second the motion. Motion passed unanimously.

• Approve Work Order No. 6 - Harris Group, Inc.
Background: Public Utility District No. 1 of Whatcom County ("District") has an agreement for Professional Engineering Services ("Agreement") with Harris Group, Inc. ("Engineer"). District and Engineer agree that this Work Order No. 06 and the tasks described herein are to be performed consistent with the terms and conditions of the Agreement. Upon signing by District and Engineer, this Work Order No. 06 will be effective and incorporated into the Agreement as an Exhibit thereto.

Walters said the District will need to upgrade the communication links for the SCADA system. With the purchase of Puget Sound Energy's ("PSE") Ferndale substation and line segment and the construction of the new Imhoff Road 115 kV line, the District will own and operate contiguous electric facilities from Water Treatment Plant No. 1 to the Refinery substation. To upgrade the system, the District will need to install fiber optic cabling segments as part of the communications system wherever feasible. The first new segment proposed for installation is between Water Treatment Plant No. 1 and the Refinery substation. If implemented, the fiber optic cabling would be attached to District electric system transmission structures over the entire route.

Work Order No. 06 would enable the Engineer to engineer, design, and prepare bid specifications for the Aerial Fiber Optics according the Scope of Work described in Work Order No. 06. The amount of the work is not to exceed $41,300.00 and will have no fiscal impact to the District because it is included in the 2011 Budget. It is anticipated that the Engineer's work would be completed by the end of November, 2011.

ACTION: Commissioner McClure motioned to approve Work Order No. 06 with Harris Group, Inc. for Aerial Fiber Optics engineering and design services for an amount not to exceed of $41,300.00 and authorize the General Manager to sign and execute the Work Order. Commissioner Murphy second the motion. Motion passed unanimously.

• Approve Work Order No. 10 - Elcon, Associates, Inc.
Background: Public Utility District No. 1 of Whatcom County ("District") has an agreement for Professional Engineering Services ("Agreement") with Elcon Associates, Inc. ("Engineer"). District and Engineer agree that Work Order No. 10 and the tasks described therein are to be performed consistent with the terms and conditions of the Agreement. Upon signing by District and Engineer, this Work Order No. 10 will be effective and incorporated into the Agreement as an Exhibit thereto.

As part of the Water Treatment Plant No. 2 Project, Walters said the Enterprise substation, which transforms and delivers electrical power to Plant No. 2 and the intake facility will need to be modified. The modifications will be implemented to improve electric service reliability through the installation of redundant facilities and to convert the secondary voltage side of the substation from the current 2400 volts to 4160 volts. This will make the substation compatible with the new 4160 volt distribution system for Water Plant No. 2 and the intake.

Elcon Associates' work will include final design of the substation modifications; preparation of technical specifications and their cost estimate for the project; and engineering support services through construction. The amount of the work is not to exceed $81,828.00 and will have no fiscal impact to the District because it is included in the 2011 Budget. Actual modifications to the Enterprise substation will begin by the fall of 2012, after the District purchases the substation from PSE.

Commissioner McClure asked if the engineering and final design is speculative in nature and if the work would be done if the substation is not purchased from PSE. Walters said the work will need to be accomplished and modifications implemented whether or not the District purchases the substation from PSE.

ACTION: Commissioner McClure motioned to approve Work Order No. 10 with Elcon Associates, Inc., engineering and design services for the not to exceed amount of $81,828.00 and authorize the General Manager to sign and execute the Agreement. Commissioner Murphy second the motion. Motion passed unanimously.

• There being no further business for the regular meeting, the Commission adjourned the regular meeting at 8:10 a.m.

President/Commissioner

Secretary/Commissioner

Commissioner