PUBLIC UTILITY DISTRICT NO. 1 - Jefferson...

Board of Commissioners Meeting

5:00 PM 19 April 2016 230 Chimacum Road - Port Hadlock, WA

PUD REGULAR BOARD MEETING 1. CALL TO ORDER

2. AGENDA

3. APPROVAL OF MINUTES

3.1 Minutes Regular Meeting of 5 April 2016 4. APPROVAL OF VOUCHERS

4.1 Financial Director Operating Statement 4.2 Summary Lead sheet 4.3 Payment of PUD#1 of Jefferson County Payroll 4.4 Payment of PUD#1 of Jefferson County Payroll – Direct Deposit 4.5 Payment of PUD#1 of Jefferson County Vouchers/Warrants

5. ITEMS FROM THE FLOOR that are not listed on the Agenda.

6. COMMISSIONER REPORTS

7. ACTION ITEMS:

7.1 Cascadia Contract Extension 7.2

8. DISCUSSION ITEMS:

8.1 PUD Financial Policy 8.2. Archbright membership 8.3 PUD travel policy 8.4 Residential appliance Rebate program 8.5 Rate Study Memo

9. MANAGER REPORT 10. COMMISSIONER CALENDAR 11. CORRESPONDENCE 12. FUTURE PLANNING 13. EXECUTIVE SESSION: Union Negotations – Manager Evaluation – Property negotiations 14. ADJOURNMENT

PUBLIC UTILITY DISTRICT NO. 1of Jefferson County

April 5, 2016

Regular Board Meeting

Draft Minutes

The regular Board of Commissioners (Board) meeting of Public Utility District No.1 of Jefferson County (PUD) was called to order by the President of the Board at 5:00 p.m. Introductions were made. Commissioners, PUD staff and consultants attending:

Commissioner Kenneth Collins, PresidentCommissioner Barney Burke, Vice President

Commissioner Wayne King, Secretary

James Parker, District ManagerRobert Caprye, District Financial DirectorBill Graham, District Resource Manager

Kevin Streett, District Electrical SuperintendentCharles Houser, General Counsel

Don McDaniel, ConsultantPamela Browning, Minute Taker

Leo Boyd, North Olympic Peninsula Data Centers representativeMark Horton, Stantec Consulting Services (Stantec) representative

Doug Huber, Port Ludlow Village Council and PUD Citizen Advisory Board Member

Agenda: The agenda was reviewed and revised:

• Executive Session: topic is General Manager Evaluation• Discussion Items: add:

◦ Quilcene School District Water System Consolidation◦ “Five Things We Can Do” Summit◦ Communications

• Future Planning: add Northwest Public Power Association (NWPPA) conference attendance

JPUD: April 5, 2016 Page 1

Minutes Approval:

Commissioner King noted the March 21 2016 Workshop minutes should be amended: page five; the third bullet should read, "Net Metering Requirements: Commissioner King would like to have a net metering COS Study conducted."

MOTION: By Commissioner Burke, seconded by Commissioner King, and unanimously carried: to approve the March 15 2016 Regular Board Meeting minutes as submitted, and the March 21 2016 Board Workshop minutes as amended.

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MOTION: By Commissioner Burke, seconded by Commissioner Collins: to post the audio recording of the March 21 2016 Board Workshop, made by PUD Citizen Advisory Board Member Tom Thiersch, to the PUD website.

The Board and legal counsel discussed whether PUD meeting audio recordings made by non-PUD staff should be posted to the PUD website.

Vote: Yea: Commissioner Burke Nay: Commissioner King Abstaining: Commissioner Collins

The motion did not carry.

Financial Operations Report: Bob Caprye and Jim Parker briefed the Board.

• Financial Reporting:

◦ Bob distributed and reviewed the report of Estimated Cash Reserves as of April 4 2016.

◦ Revised financial statements for 2011 through 2014 should be available by April 8.◦ A current operating statement will be available at the next Board meeting.

• State Audit: Official results will be available by mid to late April.

• Personnel: The Controller position was advertised this week.

• Insurance: The PUD needs an insurance policy to cover underground storage tanks. Bob is working with a Seattle broker on that policy.

Vouchers Review and Approval: The Board reviewed PUD payments registers.

MOTION: By Commissioner Burke; seconded by Commissioner King; and carried unanimously: to approve April 5 2016 warrants:

Accounts Payable: #110707 through 110867 in the amount of $ 732,899.27Payroll Checks: 70152 through 70156 in the amount of $ 10,134.26Payroll Direct Deposit in the amount of $ 118,767.70

Total Bills to be Paid: $ 861,801.23

Voided Checks: N/A

Wire Transfer: USDA (loan payment) $ 1,528,147.78

For a Grand Total of $ 2,389,949.01


Items from the Floor, not listed on the Agenda:

• The Board, PUD staff and Leo Boyd discussed the Easter Sunday telecom outage, its emergency services ramifications, and the disposition of Mobilisa assets. The Board would like to meet with JNet, NoaNet, and Clallam PUD representatives to discuss telecom issues.

• Doug Huber thanked Jim Parker and PUD staff for their presentation to the Port Ludlow Village Council. The information presented will be synthesized and posted on the Council's website.

• Commissioner Collins commended Jim Parker on his efforts regarding the Navy surveying material.

Commissioner Reports:

The Commissioners reported on meetings and events they attended, and those they plan to attend, on behalf of the PUD.

Highlights:

• Commissioner King reported on Public Works Trust Fund legislation status.• Commissioner Burke:

◦ Distributed materials from a Department of Energy symposium on electric vehicle infrastructure.

◦ Energy Northwest will be issuing its final report shortly.◦ The Board may want Jim Parker to give a presentation at the upcoming Sea

Level Rise Conference.◦ The 2020 Energy Action Group has expressed interest in participating in an

Energy Summit.• Commissioner Collins noted he learned, (at a Washington Public Utility Districts

Association meeting), that most PUDs set aside reserves for rate stabilization as well as operating costs.

Action Items:

• Tree Trimming Contracts: Jim Parker reviewed the Kemp West Inc. and Asplundh Tree Expert Company bids.

MOTION: By Commissioner Burke; seconded by Commissioner Collins; and carried unanimously: to authorize the Manager to award contracts and take other actions needed to have Asplundh do $68,000 worth of tree trimming in Gardiner, and $113,750for Kemp West to do tree trimming on Marrowstone Island.

• Backup Power Supply Agreement, (moved from Discussion Items): Jim Parker reviewed the agreement establishing a backup power reimbursement methodology for the Jefferson and Clallam PUDs.

MOTION: By Commissioner King; seconded by Commissioner Burke; and carried unanimously: to direct the Manager to go ahead with this agreement with Clallam County.


Discussion Items:

• Feasibility Study: Quilcene School District Water System Consolidation: The Board reviewed a draft report from Stantec assessing PUD and Quilcene School District water systems - to identify requirements and options for combining the two. The Board,PUD staff and Mark Horton discussed pros and cons of consolidation.

Next steps: Jim Parker and/or Kevin Streett will:◦ Work with Mark to refine the study, e.g. including additional information from the

school district;◦ Meet with school district representatives to review options and see if they're

amenable to the consolidation;◦ Identify funding sources, e.g. the Public Infrastructure Fund;◦ Bring the revised study and additional information back to the Board for review.

• Former Quilcene Hotel Site: Lead and Copper Issue: PUD staff re-sampled the site, a process which will be repeated in July and then every 3-4 years. A findings report was submitted to the Department of Health; it will send recommendations, and then PUD staff will prepare engineering drawings for installing a caustic soda apparatus if necessary.

• Things We Can Do, ( see hand-out ): This stakeholder group met last November to identify objectives for economic development and "immediate progress options" for each organization to pursue, as well as opportunities for project coordination. Commissioner Burke will attend the April 6 meeting of the group. The Board reviewed and revised the JPUD list as follows:

1. Review rates structure.2. Expand conservation efforts.3. Explore and support district heating efforts.4. Expand commercial and residential wifi.5. Explore and support local energy generation.

• Communications: Commissioner Burke expressed concerns, and the Board discussed, communication between Board members prior to Commissioner Collins' recent perspective piece in the PT Leader.

District Manager Report: Jim Parker distributed and reviewed his report on the following topics:

• Personnel issues• FEMA staff meetings• National Information Solutions Cooperative system conversion "final steps" review• Additional office space acquisition. Before the next Board meeting Jim will identify a

planner to assist the PUD in analyzing space needs and developing options.• Electrical trucks pay off• Dispatch Center rate increase• Cascadia extension conservation agreement• Reynolds well work


• Sparling well treatment• Seton booster pump vault• June emergency management exercise. Commissioner Burke noted the PUD needs to

ensure it has reliable water transportation trailer vehicle equipment available.• 2016 billings increase• Quarterly newsletter. Commissioner King shared a copy of the Clallam PUD newsletter

and noted its excellence.

Commissioner Calendar Review: The Board reviewed upcoming events, including:

• CAB Meeting: Monday, April 11; Commissioner Burke will attend.• BOC Regular meeting: Tuesday, April 19• BOC Regular meeting: Tuesday, May 3• Jefferson County FEMA drill: June 5, 6 & 7

Correspondence: Not reviewed.

Future Planning Discussion: Topics and notes:

• NWPPA conference attendance: Commissioner Burke plans to attend at least one day.

• Driving reimbursement rates: Jim Parker will check Mason PUD reimbursement requirements. Commissioner Collins said the PUD needs to do more work in this area and develop guidelines.

• NoaNet pricing:

◦ Commissioner Collins said the PUD needs to revisit this issue, get additional input, and adopt an appropriate resolution. Commissioner King agreed work on this issue needs to be expedited.

◦ Commissioner Burke would like, (1) the phone company to meet with the Board and, (2) to pursue Commissioner King's suggestion regarding holding a joint telecom providers meeting.

◦ Commissioner Collins told Leo Boyd that if he wants to gather information on this topic the Commissioner is interested in knowing more about comparative rates and their implications.

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Executive Session:

The President of the Board announced the purpose of the executive session was to review the performance of a public employee: the General Manager.

The Session was expected to take 30 minutes; it was extended an additional 10 minutes.Jim Parker noted no actions would be taken after the executive session.

The Board's Regular Board Meeting was adjourned to enter Executive Session at 7:05 p.m. and reconvened at 7:40 p.m.

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Adjournment:

MOTION: By Commissioner Burke; seconded by Commissioner King; and carried unanimously: to adjourn the April 5 2016 Regular Board Meeting at 7:42 p.m.

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Minutes prepared by Pamela Browning, Minute Taker

Approved:

______________________________ _______________Commissioner Wayne King, Secretary Date

Please note PUD Board of Commissioner meetings are audio recorded and posted to the PUD website at www.jeffpud.org, usually within 1-2 business days of each meeting. If you experience any difficulty accessing a particular recording, you may call 360.385.5800 for assistance. Jefferson PUD provides reasonable accommodations to persons with disabilities. We invite any person with special needs to contact our staff at 360.385.8351 at least 24 hours before the meeting to discuss any special accommodations.


http://www.jeffpud.org/

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DRAFT

SECOND AMENDMENT

To

CONSULTANT AGREEMENT

BETWEEN

CASCADIA CONSULTING GROUP, INC.

AND

PUBLIC UTILITY DISTRICT NO. 1 OF JEFFERSON COUNTY

This Second Amendment to (“Amendment”) is dated as of April _____, 2016 (the “Effective Date”) and is entered into by and between CASCADIA CONSULTING GROUP (consultant) and Public Utility District No. 1 of Jefferson County (JPUD),

WHEREAS, Consultant and JPUD entered into a certain Consultant Agreement on or about August 5, 2014 (the “Agreement”); and,

WHEREAS, Consultant and JPUD entered into a First Amendment to the Agreement on

or about October 20, 2015, which is hereby incorporated by reference; and WHEREAS, said First Amendment to the Agreement expired on April 1, 2016; and WHEREAS, Consultant has continued its work under the Agreement; and WHEREAS, Consultant and JPUD desire to extend the Agreement up to, and including

June 30, 2016 in order to complete work under the Agreement; and

WHEREAS, Consultant and JPUD desire to amend the Agreement again as set forth herein; and

WHEREAS, JPUD’s procurement policy allows Agreements of this type to be amended

under certain conditions; NOW THEREFORE, in consideration of the mutual promises as stated herein and for good and valuable consideration, Consultant and JPUD agree as follows:

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1. Additional tasks. Consultant shall complete the additional related tasks, and will be compensated for completed tasks since April 1, 2016, at the rate of $0.12/kWh, as described in Exhibit A, which is attached hereto and incorporated herein;

2. Additional cost. The additional cost of completing the additional tasks described in Exhibit A shall not exceed the sum of $[fill in] beginning April 1, 2016 until termination of the contract, calculated at $0.12 per kWh saved for implementing and managing the residential rebate program as described in the Agreement. 3. Duration of Amendment. This Amendment extends the Agreement up to, and including June 30, 2016. Either Party may cancel the Agreement, as modified herein, upon 30 days’ written notice signed by a representative of the Party requesting cancellation. Any additional work of the type described in the Agreement will require procurement of a new Agreement with a Consulting firm to be selected pursuant to JPUD’s procurement process.

4. Entire Agreement. As expressly modified in this Amendment, the Agreement shall

remain in full force and effect and the parties hereto acknowledge, confirm, and ratify all of the terms and conditions of the Agreement, which is incorporated herein by reference. This Amendment, together with the Agreement (including the exhibits and schedules thereto), contains the entire agreement between the parties with respect to the transactions contemplated hereunder and thereunder.

5. Counterparts. This Amendment may be executed in any number of counterparts,

and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

EXECUTED as of the date first above written by duly authorized officers of the parties

hereto, intending to be legally bound hereby.

CASCADIA CONSULTING GROUP, INC Seattle, Washington By: Its: Date: ________________

PUBLIC UTILITY DISTRICT #1 OF JEFFERSON COUNTY Port Townsend, Washington

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By: James G. Parker Its: General Manager Date: ________________

Exhibit A

Jefferson County PUD Company Policy FINANCIAL POLICY PURPOSE: The Financial Policy provides guidance and direction for the Board and staff to use in making sound finanical decisions tha ensure vital services are maintained and the Boardd’s visison for the utility is achieved. The District is accountable to its ratepayers for the responsible stewardship of public funds, which must be wisely used to “serve our community with high value utiltiy services at the lowest practial cost”. The financial Policy provides direction for the finanical management, risk management, budgetary planning and internal controls, with the intent of providing fiscal stability, maintaining a solid credit rating and assuring ratepayers the District is well managed financially. REQUIREMENTS. A. FINANCIAL MANAGEMENT. 1. Times Interest Earned Ratio “TIER” The District shall develop financial plans and rates to provide revenue sufficient to meet and maintain a TIER = 1.25 TIER shall mean the ratio determined as follows: for each calendar year: add patronage capital or margins of the Mortgagor and Interest Expense on Long-Term Debt of the Mortgagor and divide the total so obtained by Interest Expense on Total Long-Term Debt of the Mortgator. 2. Operating TIER or “OTIER” The District shall develop financial plans and rates to provide revenue sufficient to maintain an OTIER = 1.1 OTIER = (A+B)/A Where: All amounts are the same calendar year and are computed pursuant to RUS Accounting Requirements and the RUS Form 7 A= Interest Expense on Total Ling-Term Debt of the Electric Systetm, except that such Interest Expense shall be increased by 1/3 of athe amount, if any, by which Restricted Rentals of the Electric Ssytem exceed 2 percent of the Mortgagor’s Equitey; and

B= Patronage capital & operating margins of the Electric System, (which equals operating revenue and patronage capital of the Electric System operations, less total cost of electric service, including Interest Expense on Total Long-Term Debt of the electric System) plus cash received from the retirement of patronage capital by suppliers of electric power and by lenders for credit extended for the Electric System. 3. Debt Service Coverage Ratio (“DSC”) The District shall develop financial plans to maintain a debt service coverage in each plan year of at least 1.25, as determined as follows: for each calendar year add Patronage Capital or Margins of the Mortgagor, Interest Expense on Total Long Term Debt of the Mortgagor (as computed in accordance with the principles set forth in the definition of TIER) and Depreciation and Amorization Expense of the Mortgagor, and divide the toal so obtained by an amount equal to the sum of all payment of principle and interest required to be made on account of Total Long-term Debt during such calendar year increasing said sum by any addition to interest expense on account of Restricted Rentals as computed with respect to the Times Interest Earned Ration herein. 4. Operating DSC or “ODSC” shall man Operating Debt Service Coverage calculated as: ODSC = (A+B+C)/D Where: All amounts are for the same calendar year and are computed pursuant to RUS Accounting and RUS form 7; A = Depreciation and Amortization Expense of the Electri System B= Interest Expense on Total Long-Term Debt of the Electric System, except that Interest Expense shall be increased by 1/3 of the amout, if any, by which the Restricted Rentals of the Electric System exceed 2 percent of the Mortgagor’s Equity; C= Patronage capital & operating margins of the electric System, (which equals operating revenu and patronage capital of Electric System operations, less total cost of electri service, including Interest Expense on Total Long-Term Debt of the Electric system) plus cash received from the retirement of patronage capital by suppliers of electric power and by lenders for credit extended for the Electric System; and D= Debt service billed wihich equals the sum of all payments of principal and interest required to be made on account of Total Long-Term Debt of the Electric System during the calendar year, plus 1/3 of the amount, if any, by which Restricted Rentals of the Electric System exceed 2 percent of the Mortgagor’s Equity. 5. Actual debt service coverage for all non electrical purposes as defined in the bond resolutons shall not be allowed to fall below 1.25x. Operating income may be adjusted by transfers to or from the rate stabilzaiton account in accourdance with bond resolutions. Financial plans should not forecast the defeasance of debt for purposes of achieving the minimum coverage for more ant one consecurtive year.

6. Debt/Asset Ratio The District will develp financial plans to maintain a debt to total asset ratio within the median national as published in the APPA annual national report for utilities with generators 7. Reserves The District shall develp financial plans to maintain end-of-year cash balances sufficient to: a) Provide funding for a minimum of 90 days of expenses based on the planned year’s budget (highest 3 months). b) Financial plans should provide for cash balances between 100% and 125% of the established minimum level. The District shall maintain a $10 million line of credit. Minimum level of avalable cash will be equal to the amount required to maintain the District’s credit rating. Currintly, the target level of available cash for an “A’ rated utility is between 90 and 120 days. Available cash is defined as cash and investments in non-restricted accounts and any available funds from the line of credit. Excess cash shall be defined as amounts above the 125% level. When actual end of year available cash balances exceed 125% of the trageted minimum cash balances for both the year end and subsequent operating year, the Board may direct staff to use the excess cash for debt retirement, a rate stabilzation fund, rate reduction, customer rebates, or other legal purposes. 4. Debt/Revenue Financing The District shall develop financial plans to maintain the funding of gross non-generation capital improvements through at least 60% from current revenue and no more than 40% from long term financing over a rolling ten-year period. Short-term debt should be retired within two years of initial borrowing 5. Competitive Rates The chief objective of rate setting shall be to ensure that revenue requirements are consistent with the financial goals of the district including cash requriements, debt service coverage, and debt financing limits. While the District desires to maintain competitive rates as compared to similar utlities, this objective is subordinate to, the District’s financial goals. Rates should be develped so as to minimize the subsidization of one rate class by another. Cost of service studies should be conducted every three to five years with resluts presented to the Board.

B. RISK MANAGEMENT 1. RMC The District Manager shall ensure the District maintaint a Risk Management Committee (RMC) to manage power supply risk for the District. The objective of the risk management program shall be to achieve the net power supply budget. The RMC shall develop, maintain and update as requied risk management policy for approval by the Board. The risk management program shall be designed to accept reasonable exposure to power market price volatility and counterpary credit exposure in order to maximze the benefits of the District’s power supply portfolio. The RMC may use derivatives and other hedge, approved in its ploicies, as a means of miimizing the District market risk while atetmpting to maximize its opportunities. Trades for speculative purposes are prohibited 2. Investment In accordanc3 the the District’s investment policiy, cash reserves will be invested in a manner to provide maximum security with the highest level of return. 3. Insurance The District shall maintain insurance, reserves, or participate in an insurance pool to protect against risk of property, casualty, and liability losses, and this shall be reviewed annually. C. BUDGETARY PLANNING AND INTERNAL CONTROLS 1. Integrated Plans (Electric/Telecom/Water/Sewer) The General Manager shall develop the following plans and forecasts for approval by the Board: Retail Energy Sales Forecasts Power Suppy Plan Capital Requirements Plan Long-range Financial Plan Annual Budget 2. Controls The Board shall approve the District’s budget as prescribed by State Law prior to the start of each fiscal year. The Baord shall approve total amounts for each of the following budget categories:

Revenues Net Power/Telecom Expense Net Water/Sewer Expense Non-power Operating Expenses Net Capital Additions Debt Service Budget amounts will be presented using the accrual basis of accounting. Debt principal will be based on cash requirements. The General Manager shall notify the Board promptly when expendiutres within each category are anticipated to excced the budget and provide an explanation with justification for the overrun. Budget amuendments will be presented to the Board in August of each year as necessary. In order to ensure proper recording of expenditures for management analysis, financial statement reporting, and rate development, expenditures shall be charged to the general ledger account that best reflects the purpose of or which the expenditure was made, not an account where an excess of budgeted funds may exist. All material and service will be procured in accordance with State statues, incouding but not limited to public works and competive bid laws. 3. Reporting Monthly financial report will be provided to the Board including District operating statements, balance sheet, capital expenditures report, and cash expenditure report. Actual results will be compared ot budgeted levels, with an explanation of variances. Investment portfolio updates shall be presented to the Board monthly An annual Finacial Report, prepared in accordance with generally accepted accounting principles, and audited in accordance with generally accepted auditing standards, shall be distributed to the Board and other interested parties. Effective: 2016 Adopted Resolution No. 2016- Former Resolution No. N/A

Jefferson County Public Utility District Travel Policy

Purpose: This policy provides guidance concerning travel while JPUD Commissioners and employees are conducting official District business. In General:

A. Travel‐related expenses will only be reimbursed for travel outside of Jefferson County. B. Travelers are required to take steps to minimize travel expenses to the extent practical. C. The departure point for travel will be either 310 Four Corners Road, Port Townsend, Washington

or the traveler’s residence, whichever is closer to the travel destination. D. The return point for travel will be either 310 Four Corners Road, Port Townsend, Washington or

the traveler’s residence, whichever is closer to the travel destination. E. No reimbursement will be made without detailed receipts, with the exception of per diem. The

General Manager, or designee, will make the sole determination whether the documentation provided is reasonable, except where the General Manager is the traveler, the Board President will make such determination.

F. When the General Manager is the traveler any required authorization will come from the Board President. When a Board member is the traveler, any required authorization will come from the Board acting as the JPUD Governing Body.

Travel Authorization: Any travel requests that allow for reimbursement to the traveler must be pre‐approved on the attached JPUD travel request form. Meal Per Diem Rates: JPUD uses the rates set by the U.S. General Services Administration. To determine the rate for individual meals, the following calculations rounded to the nearest dollar apply: Breakfast: 25% of the daily GSA amount Lunch: 30% of the daily GSA amount Dinner: 45% of the daily GSA amount Travelers are required to accept per diem rather than reimbursement, unless such would be impractical or not in JPUD’s best interest as determined by the General Manager, or designee, or the Board President where the General Manager is the traveler, or the Board where a Board member is the traveler. Meals Included in Registration Fees: If meals are provided at an event and are included in the registration fee for that event, the traveler is not eligible for meal per diem for that meal. Continental meals or light refreshments do not count as a meal. Lodging Rates: Travelers will be reimbursed for actual costs, as evidenced by a receipt. Travelers may also use a JPUD credit card if authorized and available. Travelers should attempt to reserve lodging at the lowest available rate. Lodging is not authorized when the destination is under 50 miles away absent unusual circumstances as determined by the General Manager or designee, or by the Board President where the General Manager is the traveler, or the Board where a Board member is the traveler. Final Day of JPUD Business: Payment for lodging expenses related to the night of the traveler’s final day of business may be authorized under the following circumstances:

A. When the overnight stay is more economical to JPUD (such as the increased cost of travel the final day of business being greater than an extra night’s lodging and travelling the following day.)

B. When the health or safety of the traveler is at unreasonable risk. C. In exceptional circumstances approved by the General Manager, Board President, or Board, as

appropriate. Automobile use: JPUD vehicles will be used for JPUD business, unless a JPUD vehicle is not available, or where use of a non‐JPUD vehicle is determined to be impractical by the General Manager, Board President, or Board, as appropriate. Where use of a non‐JPUD vehicle is approved, mileage reimbursement usage will be at the then‐current Internal Revenue Service rate. When JPUD vehicles are unavailable, travelers will make reasonable efforts to use as few non‐JPUD vehicles as possible. Non‐employee passengers in JPUD vehicles: Non‐JPUD passengers may accompany JPUD employees or Board members in a JPUD vehicle used for a conference, seminar, meeting, or similar activity, provided JPUD’s insurance coverage is not adversely affected, there is no increased cost to JPUD, the passenger does not drive the JPUD vehicle at any time absent a health emergency or immediate risk of safety, and the use of the JPUD vehicle continues to be strictly business related. Reimbursement Procedure: For expenses not covered by per diem, a travel expense reimbursement form must be completed that includes a detailed explanation of the items purchased and itemization of the amounts where appropriate, along with a description that clearly evidences the business purpose of the expense. JPUD will not reimburse for:

A. Travel or meals paid by any other organization. B. Alcoholic beverages. C. Valet services unless no other reasonable option existed. D. Expenses incurred by anyone other than the employee. E. Fees for sightseeing tours or other activities with no direct relationship to District business, and

entertainment expenses. F. Mileage when traveling as a passenger. G. Any other expenditure for personal purposes.

Extending a trip for personal reasons: A business trip may be extended for personal reasons, such as a vacation, provided JPUD does not incur any additional expense. If additional expense is incurred, JPUD will reimburse only up to the expense that would have been incurred had the trip not been extended. The same expense calculation will be made if the traveler chooses to take a spouse, domestic partner, or other family member on a trip. Traveler’s responsibility to abide by travel policy: It is the traveler’s responsibility to understand and abide by this policy at all times. Claiming a misunderstanding of this policy will not be grounds for reimbursement that would otherwise not be authorized. Travelers should clarify any reimbursement issues before they incur any expense for which they intend to seek reimbursement. Modification of Policy: If at any time the General Manager determines administration of any part of this policy is not in the best interest of JPUD, he/she may modify or suspend the part in question pending consideration and final action by the Board.

Memo To: PUD Board of Commissioners; Jim Parker, General Manager; Andrew Miller, BPA Energy

Efficiency Representative

From: Bill Graham, Resource Manager

RE: Jefferson PUD Residential Appliance Rebate Program

Date: 4/18/2016

Background:

Since becoming an electric utility, April 1, 2013, the PUD has honored BPA’s appliance rebate

program and has been rebating customer appliance purchases dating back to our start date. A

BPA audit of our program showed documentation problems early on even after Cascadia

became our rebate processor in 2014. The program continues to sap customer service

resources without resulting in significant energy savings (see graph). Proposed solution is to

abandon the in‐houses appliance rebate program and fully embrace the Clear Result market

allocation in‐store instant rebate program when it becomes a full time program (currently is

only holiday promotional).

Problem Statements –

1) Residential rebate applications for appliances consume customer service and

administration time.

2) There is a possibility of double dipping into the program if a customer receipt from a

Clear Result participating store slips through our own appliance program.

3) Cascadia Consulting contract is soon to expire putting the full load of the residential

rebate program on to the PUD.

4) Customers are frequently frustrated by our bureaucratic process that prevents us from

paying out rebates in a timely manner.

Advantages

1) We are already enrolled in instant rebate program for appliances through Clear Result,

the same company that manages the instant rebate for lighting and showerheads.

2) Eliminates missing applications, receipts, signatures, call backs to customers for

disqualifications, etc. that can create potentially negative interactions with customers.

3) Reduces BPA program audit issues.

4) Reduces administration time.

5) Reduces phone calls.

6) Instant rebate at point of sale for customer. No waiting for rebate check in the mail.

7) Administrative effort more proportionate to actual energy savings.

8) Unlike lighting and showerhead program, this is branded with our logo.

Disadvantages

1) Clear Result program is currently only holiday promotions, but is working toward being

year‐round.

2) Rebate amounts will generally be less for customer.

3) Does not apply to online purchases, even with participating vendors.

Recommendation

Staff recommends phasing out residential appliance rebate program once the Clear Result

market allocation appliance rebate program is year round. PUD will continue to honor rebate

purchases with our applications until if/when Clear Result is full time, and suggest phasing out

in‐house program, honoring the in‐house rebate for no more than three months once full‐time

program has gone live. Staff will then deploy promotional information announcing the program

on the website and in local media (PT Leader/PDN) to inform our customer base of the change.

Distribution of Residential Deemed Measures

DRAFT

570 Kirkland Way, Suite 100 Kirkland, Washington 98033 Telephone: 425 889‐2700 Facsimile: 425 889‐2725 A registered professional engineering corporation with offices in Kirkland, WA and Portland, OR

April 7, 2016

TO: Jim Parker

FROM: Gary Saleba

SUBJECT: Project Memo for Rate Study Update

CC: Gail Tabone, Anne Falcon

At your last Board meeting, we discussed the need to update your retail rates to reflect the PUD’s most recent capital expenditure budget (CAPEX), staff level changes and final BPA rates. The purpose of this memo is to recap EES’s understanding of what is needed to achieve these objectives and provide the PUD with a vehicle to help finalize EES’s scope of work for this update. A rate study follows three sequential steps of revenue requirement, cost of service analysis (COSA) and rate design. This memo will follow these same steps. Revenue Requirement The cash‐basis revenue requirement will be a 5‐year forecast from CY 2017 to 2021. The load forecast EES used in the 2015 study is still okay. O&M expenses from the last study should be adjusted to account for the new position the PUD intends to fill. Updated labor cost estimates are included as Attachment 1. Material costs will be similar to the last rate study as will be taxes and other miscellaneous expenses. BPA power costs will be based upon current Tier 1 rates escalated at 6% every two years. A low income assistance program costing $400K/year should be included as a placeholder. An approved CY 2016 budget is included as Attachment 2. The PUD has a new capital budget. This CAPEX is included as Attachment 3. Note on CAPEX financing, we should look at three options – 100% cash, 50%/50% cash/debt and 100% debt. Also, a new PUD building is in play. This CAPEX has funding for a new building. Finally, we should move CAPEX around to levelize annual amounts.

MEMORANDUM TO Jim Parker April 7, 2016 Page 2

Revenues at present rates should be calculated on the current rate schedules. Note the PUD has changed the street lighting rates. These new street lighting rates are included as Attachment 4. Regarding financial management metrics, Attachment 5 shows the trend in cash balances. We need to track cash balances in our financial forecasts. The PUD would also like to discuss overall financial management policies with the Board. An example of what would be optimal in this regard is attached as Attachment 6. This financial forecast will show various sensitivities to see what the resultant rate impacts are. Cost of Service Analysis (COSA) The same COSA model/forecast used last time will be used again. Revenue to cost ratios will be the metric used to determine whether everyone is paying their fair share. A couple of tweaks to the COSA: Port Townsend Paper (PTP) should be split out as a separate class. PTP should be allocated

their fair share of transmission expenses, annual capital costs (if any), A&G, metering, and general plant costs. The contracts between PTP and the PUD are included as Attachment 7.

Even though a consolidation of rate schedules is anticipated, we should keep the existing

schedules in place, then combine them later when appropriate. Rate Design The goal (again) is to simplify/consolidate the current rate schedules. Below are some possible goals for rate reform: Combine Rate 7 and Rate 8 with flat energy charge. Rate 24 – no demand charge (<50 kW) no seasonality. Combine Rates 25, 26 and 31. No seasonality, no blocking, given discount to primary

metered (~$1.85/kW). Look at converting in Schedule 31 to $/kVA charge which may require keeping them separate from Rates 25 and 26.

Move irrigation to Commercial rates. Schools – go to TOU rates with peak periods that match PUD load profile (i.e., higher

charges in AM). Other rate design issues are outlined below:

MEMORANDUM TO Jim Parker April 7, 2016 Page 3

A new low income/senior discount program should be evaluated. The Citizen Advisory Board’s recommendations are attached as Attachment 8.

Net metering analysis is needed where we compare the revenues received from them to their cost of service.

The line extension policy should be updated. Pole attachment rates are still sensitive. PUD staff direction is needed on this topic. Miscellaneous charges need to be updated. Data Requests Once the scope of EES’s update is finalized with PUD staff, we will compile a data request for the rate study. Schedule It is anticipated that EES will have an updated revenue requirement/COSA by June. Rate designs should be done by July. Implementation of new rates could be as early as September. Budget Based on this scope of work, the budget for this update should approximate the spending levels for the earlier EES rate study.

QUILCENE COMPLETE STREETS COMMUNITY DESIGN WORKSHOP 2

Tueday Evening

April 19, 2016

6:30 pm – 9:00 pm

\

Quilcene

Community Center

294952 US Hwy 101

Quilcene, WA 98376

Refreshments

provided by Count

Me In For Quilcene

For more

information go to:

www.co.jefferson.wa.us

JEFFERSON COUNTY

DEPARTMENT OF

PUBLIC WORKS

623 Sheridan Street

Port Townsend, WA 98368

360.385.9160

Eric Kuzma, Project Mgr.

[email protected]`

DOH Amendment N21545-1 Page 1 of 4

CONTRACT AMENDMENT

1. NAME OF CONTRACTOR

PUD #1 of Jefferson County

2. CONTRACT NUMBER

N21545

1a. ADDRESS OF CONTRACTOR

310 Four corners Rd

2a. AMENDMENT NUMBER

1b. CITY, STATE, ZIP CODE

Port Townsend, WA 98368

1

3. THIS ITEM APPLIES ONLY TO BILATERAL AMENDMENTS.

The Contract identified herein, including any previous amendments thereto, is hereby amended as set forth in Item 5 below by

mutual consent of all parties hereto.

4. THIS ITEM APPLIES ONLY TO UNILATERAL AMENDMENTS.

The Contract identified herein, including any previous amendments thereto, is hereby unilaterally amended as set forth in Item 5

below pursuant to that changes and modifications clause as contained therein.

5. DESCRIPTION OF AMENDMENT: The purpose is to correcting the contract terms to reflect the

appropriate federal guidance.

5a. Grant Terms and Conditions:

The following terms are replaced and supersede previous contract language:

“Allowable Cost” shall mean an expenditure which meets the test of the Uniform Guidance (2CFR 200) (see

“I. Federal Compliance”). The most significant factors affecting allowability of cost are; 1) they must be

necessary and reasonable, 2) they must be allocable, 3) they must be authorized or not prohibited under state or

local laws and regulations, and 4) they must be adequately documented. For more specifics see Selected Items

of Cost 2 CFR 200.420.

“Contract” shall mean the purpose of obtaining goods and services for the non-Federal entity's own use and

creates a procurement relationship with the Contractor. See §200.22 Contract. Characteristics indicative of a

procurement relationship between the non-Federal entity and a Contractor are when the non-Federal entity

receiving the Federal funds:

A. Provides the goods and services within normal business operations;

B. Provides similar goods or services to many different purchasers;

C. Normally operates in a competitive environment;

D. Provides goods or services that are ancillary to the operation of the Federal program; and

E. Is not subject to compliance requirements of the Federal program as a result of the agreement, though

similar requirements may apply for other reasons.

“Contractor” shall mean that agency, firm, provider, organization, individual or other entity performing

services under this contract. It shall include any subcontractor retained by the prime contractor as permitted

under the terms of this agreement.

“Noncompliance” shall mean if a non-Federal entity fails to comply with Federal statutes, regulations or the

terms and conditions of a Federal award, the Federal awarding agency or pass-through entity may impose

additional conditions, as described in §200.207 Specific conditions. If the Federal awarding agency or pass-

through entity determines that noncompliance cannot be remedied by imposing additional conditions, the


Federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate

in the circumstances:

A. Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more

severe enforcement action by the Federal awarding agency or pass-through entity.

B. Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the

activity or action not in compliance.

C. Wholly or partly suspend or terminate the Federal award.

D. Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding

agency regulations (or in the case of a pass-through entity, recommend such a proceeding be initiated by a

Federal awarding agency).

E. Withhold further Federal awards for the project or program.

F. Take other remedies that may be legally available.

“Risk Assessment” shall mean (2 CFR 200.331(b)) DOH is required to evaluate each subrecipient's risk of

noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of

determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which

may include consideration of such factors as:

A. The subrecipient's prior experience with the same or similar subawards;

B. The results of previous audits including whether or not the subrecipient receives a Single Audit in

accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar

subaward has been audited as a major program;

C. Whether the subrecipient has new personnel or new or substantially changed systems; and

D. The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal

awards directly from a Federal awarding agency).

“Specific Conditions”

A. The Federal awarding agency or pass-through entity may impose additional specific award conditions as

needed, in accordance with (2 CFR 200.207) paragraphs (b) and (c) of this section, under the following

circumstances:

1) Based on the criteria set forth in §200.205 Federal awarding agency review of risk posed by applicants;

2) When an applicant or recipient has a history of failure to comply with the general or specific terms and

conditions of a Federal award;

3) When an applicant or recipient fails to meet expected performance goals as described in §200.210

Information contained in a Federal award; or

4) When an applicant or recipient is not otherwise responsible.

B. These additional Federal award conditions may include items such as the following:

1) Requiring payments as reimbursements rather than advance payments;

2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance

within a given period of performance;

3) Requiring additional, more detailed financial reports;

4) Requiring additional project monitoring;

5) Requiring the non-Federal entity to obtain technical or management assistance; or

6) Establishing additional prior approvals.


C. The Federal awarding agency or pass-through entity must notify the applicant or non-Federal entity as to:

1) The nature of the additional requirements;

2) The reason why the additional requirements are being imposed;

3) The nature of the action needed to remove the additional requirement, if applicable;

4) The time allowed for completing the actions if applicable, and

5) The method for requesting reconsideration of the additional requirements imposed.

Any specific conditions must be promptly removed once the conditions that prompted them have been

corrected.

“Subrecipient” shall mean a non-Federal entity that received a subaward from a pass-through entity to carry

out part of a Federal program; but does not include an individual that is a beneficiary of such program. A

subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. (2 CFR

200.93)

Characteristics which support the classification of the non-Federal entity as a subrecipient include when the

non-Federal entity:

A. Determines who is eligible to receive what Federal assistance;

B. Has its performance measured in relation to whether objectives of a Federal program were met;

C. Has responsibility for programmatic decision making;

D. Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and

E. In accordance with its contract, uses the Federal funds to carry out a program for a public purpose specified

in authorizing statute, as opposed to providing goods or services for the benefit of a pass-through entity.

General Conditions: The following terms and conditions are replaced and supersede previous contract

language:

RECORDS, DOCUMENTS, AND REPORTS –The Contractor shall maintain books, records, documents,

data and other evidence relating to this contract and performance of the services described herein, including but

not limited to accounting procedures and practices which sufficiently and properly reflect all direct and indirect

costs of any nature expended in the performance of this contract. Contractor shall retain such records for a

period of six (6) years following the date of final payment. At no additional cost, these records, including

materials generated under the contract, shall be subject at all reasonable times to inspection, review or audit by

DOH, personnel duly authorized by DOH, the office of the state auditor, and federal and state officials so

authorized by law, regulation or agreement.

If the contract reimburses the Contractor for costs incurred in performance, the Contractor shall in addition

maintain books, records, documents and other evidence of procedures and practices which sufficiently and

properly reflect all direct and indirect costs of any nature expended in the performance of this contract.

If any litigation, claim or audit is started before the expiration of the six (6) year period, the records shall be

retained until all litigation, claims, or audit findings involving the records have been resolved.

5b. Federal Compliance and Standard Federal Certifications and Assurances: The following requirements are

replaced and supersede previous contract language:

I. Uniform Administrative Guidance: The Uniform Administrative Guidance (Supercircular) became

effective December 26, 2014 and combines numerous OMB Circulars into one document. This document

established requirements which govern expenditure of federal funds. These requirements apply to the

Department of Health, as the primary recipient of federal funds, and then follow the funds to the


subrecipient. The Uniform Administrative Guidance provides the applicable administrative requirements,

cost principles, and audit requirements are identified by subrecipient organization type.

Compliance Matrix

OMB CIRCULAR

ENTITY TYPE ADMINISTRATIVE

REQUIREMENTS

COST

PRINCIPLES

AUDIT

REQUIREMENTS

State. Local and Indian

Tribal Governments &

Governmental Hospitals

2 CFR 200

Subpart D

2 CFR 200

Subpart E

2 CFR 200

Subpart F

Non-Profit Organizations 2 CFR 200

Subpart D

2 CFR 200

Subpart E

2 CFR 200

Subpart F

Hospitals 2 CFR 200

Subpart D

45 CFR 74

Appendix E

2 CFR 200

Subpart F

Colleges or Universities

& Affiliated Hospitals

2 CFR 200

Subpart D

2 CFR 200

Subpart E

2 CFR 200

Subpart F

5c. Period of Performance: remains unchanged.

5d. The Effective Date of this Amendment: is the Date of Execution.

6. All other terms and conditions of the original contract and any subsequent amendments thereto remain in full

force and effect.

7. This is a unilateral amendment. Signature of contractor is not required below.

Contractor hereby acknowledges and accepts the terms and conditions of this amendment. Signature is

required below.

8. CONTRACTOR SIGNATURE (also, please print/type your name)

DATE

9. DOH CONTRACTING OFFICER SIGNATURE

DATE

This document has been approved as to form only by the Assistant Attorney General.

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