McMinnville Water & LightCommission MeetingMay 15,2018

The McMinnville Water and Light Commission met in regular session at McMinnvilleWater & Light's Commission Room at 5:00 p.m.commission members present were: Mayor Scott Hill, Commissioners TomTankersley, Patrick Fuchs, and Mike Keyes. Absent: Ed Gormley (excused)Staff present: General Manager John Dietz, MW&L Attorney Sam Justice, Clerk TrenaMcManus, Finance Director Mark Dunmire, Water Superintendent Bob Klein, ElectricDivision Director Scott Rosenbalm, and Purchasing Manager Chad Hudson.visitors present: Brent Keller of Mason, Bruce & Girard, Mark Davis, and NicoleMontesano of the News Register.

Mayor Hill called the meeting to order

Clerk McManus took roll call.

Mayor Hill read the items on the consent agenda and asked if the Commission wanted toremove any items. Commissioner Tankersley asked that Item b., Covenant to RelocateElectric Utilities-Orchard View Ridge Subdivision and Item c., Land Use Agreementwith BPA, be removed from the consent agenda. Items b. and c. were removed from theconsent agenda.It was moved by Commissioner Keyes. seconded by Commissioner Fuchs. and passed blra unanimous vote to approve the remaining items listed on the consent agenda:

1. Minutes of previous meeting dated April 17 and 18.2018.2. Commission authorization to award purchase agreements for the annual

requirement of drinking water treatment chemicals to Cascade ColumbiaDistribution. Mosaic Global Sales. Northstar Chemicals. and Univar USA. Inc.for a total of $123,570.80 as the lowest responsive and responsible bids inco^cffdcr,oe rxrith OPS ? 798 55 reoerdino sealcd hidrlino

Mayor Hill stated that the consent agenda items removed will be placed under NewBusiness.

Mayor Hill asked if there were any questions regarding the accounts payable andpurchasing reports that were included in the Commission packet.

Mr. Brent Keller of Mason, Bruce & Girard (MB&G) gave his monthly report on forestmanagement activities.

Commissioner Tankersley referred to the Covenant to Relocate Electric Utilities- OrchardView Ridge Subdivision materials that were included in the packet and inquired about themaintenance charge referenced in the document and how it will be tracked and paid.General Manager John Dietz stated that it would be tracked and paid through a workorder. Commissioner Tankersley noted that the covenant document needs to be clear toany future owners of the property that the burden of paying to move the electric facilitiesout of the public right-of-way and into the public utility easement is being placed on theproperty owner. It was moved by Commissioner Tankersley. seconded blr CommissionerKeyes. and passed by a unanimous vote to approve the form of Covenant to be recorded

PAB ofvlslon I

public right of way into the public utilitv easement. as may be required in theto

thatthese future charges malr result in disconnection of electric service.

Commissioner Tankersley next referred to the BPA Land Use Agreement that wasincluded in the packet and asked if BPA's current easement gives BPA the right torestrict light poles from being placed within the easement. Electric Division DirectorScott Rosenbalm confirmed that it does. It was moved by Commissioner Tankersley.

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I43seconded by Commissioner Keyes, and passed by a unanimous vote to approve BPALand Use Agreement No. 20180185 whereby BPA consents to MW&L rental light poleson a BPA transmission easement across MW&L customer's private property. andauthorize the Mayor and Clerk to sign the document.

In response to Commission direction from the April2018 meeting, Finance DirectorMark Dunmire presented a revised draft Investment Policy to the Commission. Mr.Dunmire explained that in order to comply with law, this latest revised draft would needto be reviewed by the Oregon Short Term Funds (OSTF) Board for comment prior toadoption by MW&L and prior to MW&L investment in the Oregon Local GovernmentIntermediate Fund (OLGIF). Mr. Dunmire also addressed the investment policy draftprepared by Commissioner Keyes, which was also presented to the OSTF staff forreview. Mr. Dunmire explained that the OSTF Board's next meeting is in July, and itcould take an additional month to receive comments on the revised draft InvestmentPolicy and on Mr. Keyes' draft. Mr. Dunmire noted that the MW&L balance in the LocalGovernment Investment Pool is currently at its maximum limits. Currently, without otherinvestment options, any excess funds will be required to be left in the checking account(non-interest earning). Mr. Dunmire reminded the Commission that the OSTF Board hasalready reviewed and issued comments on the MW&L Investment Policy draft which wasbefore the Commission in April, but not approved. Mr. Dunmire presented an option toreconsider and adopt the April 2018 Investment Policy to permit investment into theOLGIF and at the same time seek review and comment from the OSTF Board on therevised Investment Policy and on Mr. Keyes' short-form policy. The Commission couldconsider adoption of either of these policies after the OSTF Board has reviewed them andmade comments. After some discussion, Commissioner Keyes recommended that hisshort-form (1 page) investment policy be withdrawn from consideration and only submitthe current revised Investment Policy to the OSTF Board for review and comment.Commissioner Keyes stated that it is in MW&L's best interest to look at other investmentoptions to ensure that MW&L funds are being invested in the best possible way. After ashort explaination of the location of the resolution in the April and May packet materials,MW&L Attorney Justice read Resolution No. 2018-8 by title only. It was moved byCommissioner Tankerslev and seconded bv Commissioner Fuchs to approve ResolutionNo. 201 8-8. a resolution adopting an Investment Policy for surplus funds of the Cit), ofMcMinnville. a municipal corporation of the State of Oregon. acting by and throueh itsWater and Light Commission ("MW&L") and to make the following acknowledgment a

minutes of thisHill-aye. Commissioner Tankersley-aye. Commissioner Ke),es-a)re. CommissionerFuchs-aye.

The Ci\t o-f McMinnville, a municipal corporation o.f the state qf Oreqonacting blt and through its Water and Light Commission acknowledges the

.following; members o-f this bodv and investment sta.{f have read andunderstand the "Oregon Local Government Intermediate Fund In-formationPamphlet" provided b)t Oregon State Treasuryt. Investments in OLGIF aresubject to a loss, and investments into OLGIF and divestments from OLGIFmqt be sub_iect to restriction by Oregon State TreasurJ).

Staff was directed to proceed with submitting Finance Director Mark Dunmire's revisedInvestment Policy to the OSTF Board for review and comment, and also investigate otherinvestment options.

MW&L Attorney Sam Justice updated the Commission regarding concerns about theORWARN (oregon water/wastewater Agency Response Network) mutual aidagreement relating to the indemnification clause and application of CIS insurancecoverage. He also addressed his recent discussion with the MW&L insurance broker, MrEastlund, regarding the availability of other insurance to cover any insurance gap incoverage. Correspondence has been directed to ORWARN on this topic. After adiscussion, staff was directed to contact other ORWARN members to discuss MW&L'sconcems about the mutual aid agreement.

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Purchasing Manager Chad Hudson presented the staff request seeking approval of apublic improvement contract for the installation of vaults and conduit, by primary meansof open trenching on the Hill Road project.

Mr. Hudson explained that this project is a result of road work being done by the City ofMcMinnville through a transportation bond passed in20l4. MW&L Staff conducted aformal procurement process and five bids were received.

Bidder Bld PricePacific Excavation, lnc.

NW Mctal Fab & Pipe, Inc.

R2 Contractors

Lyda ExcavalingC&11'l Excaviltion

s 1,475,000,00

$ t,szs,44t.7o5 1,728,310.30

s 1,974,479.80

5 2,200,191.00

Pacific Excavation, Inc. was determined to be the lowest responsive, responsible bidderand staff recommended that the Commission make an award to this bidder.

Commissioners Fuchs and Tankersleys discussed whether either would have a conflict ofinterest in this matter. Commissioner Fuchs described his interest and CommissionerTankersley disclosed that his law firm has represented Commissioner Fuch's company(Online NW) in the past, but the representation did not pertain to this matter.

It was moved by Commissioner Keyes. seconded by Commissioner Tankersley. andpassed by the affirmative votes of Commissioner Keyes. Commissioner Tankersley. and

Mayor Hill to approve the award of a public imorovement contract with PacificExcavation. Inc. for the installation of vaults and conduit. by primary means of opentrenching at Hill Road for $L3?5,000 as the lqwrst responsible bid pursuant to ORS279C.375 and authorize the Mayor and Clerk of Commission to sien the contracts.subject to issuance of a Notice of Intent to Award and no protest being filed.Commissioner Fuchs abstained.

Purchasing Manager Chad Hudson next referred to the packet material regarding therequest for approval of a joint trench agreement with other franchise utilities to improveproject coordination and expedite completion of the project.

Commissioner Fuchs declared a conflict of interest on this matter due to his ownership ofOnlineNW and did not participate in the discussion and the vote. CommissionerTankersley stated that he would like to disclose the fact that his law firm has representedCommissioner Fuch's company (Online NW) in the past, but the representation did notpertain to this matter, and that he felt comfortable voting on this matter and did notconsider this matter to present a conflict of interest for him. Mr. Hudson noted that thefranchise utilities that participate in this agreement will reimburse MW&L for theirportion of the joint trench project. Commissioner Keyes asked how the costs will be

allocated and Electric Division Director Scott Rosenbalm said that the costs are

determined by an overall percentage of the total footage of conduits in the trench. It wasmoved by Commissioner Keyes. seconded by Mayor Hill. and passed by affirmativevotes of Commissioner Keves and Mavor Hill to approve the form of Joint lreqpfuAgreement(s) with other franchise utilities to reimburse MW&L for telecom's portion ofthe ioint trench proiect costs: and authorization for the Mavor and Clerk of theCommission to execute the document(s). Commissioner Tankersley participated toestablish the quorum of three. but abstained. As indicated above. Commissioner Fuchsdid not participate and did not vote.

Finance Director Mark Dunmire presented the proposed 201 8- l9 McMinnville Water andLight budget to the Commission. Mr. Dunmire went through highlights of the budget andanswered questions. There was a discussion. The final document will be brought back tothe Commission next month for adoption.

Finance Director Mark Dunmire reported to the Commission that a water cost of servicestudy has been completed by Mark Beauchamp of Utility Financial Solutions, LLC and

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he is prepared to present his findings to the Commission. The Commission directed staffto publish notice of a public hearing regarding water rates for June 12, 2018 at 4:00 p.m.Staff indicated that Mr. Beauchamp is expected to present the cost of service study to theCommission during this hearing.

Water Superintendent Bob Klein reported to the Commission that he spoke with ClarkBalfour (legal counsel on this matter) after the last Commission meeting regarding thelanguage ('any other legally recoverable damages') contained in the Mark and SharonSitton Trust easement document. Mr. Balfour reviewed the document and continued torecommend the document for execution. The document has been signed and it is now inescrow for closing. Mr. Klein indicated that that the final easement document (John andLinda Lenyo Trust) will be discussed further in executive session.

MW&L Attorney Sam Justice informed the Commission that the individualCommissioner performance reviews for General Manager John Dietz's 6-monthprobationary period have been completed. He indicated that the Commission committeewill meet with the General Manager on May 21,2018 to review the evaluations. Thereview will be concluded with the commission during the June meeting.

General Manager John Dietz reported to the Commission that after negotiations withBPA, a proposed purchase price of $40,000 has been tentatively reached for the purchaseof approximately 5.5 miles of 115kV transmission line and right-of-way. This line isidentified as the Walnut City 115kV tap line from, and including, switch P,-1292 to thetermination of the line at the McMinnville Walnut City Substation. Staff will continue towork with BPA on this and will bring more information to the Commission when it isavailable.

At7:12 p.m., Mayor Hill called for Executive Session pursuant to ORS 192.660(2)(e)toconduct deliberations with persons designated to negotiate real property transactions andasked staff not involved in the Executive Session to leave the room and advised the pressnot to report on the subject matter of the Executive Session.

Mayor Hill reconvened the regular meeting at7:21 p.m.

Ita unanimous vote to authorize and dlrect stpff to prepare an Aereement to Modif.yEasement and for Construction Easements with Trustees John andLinda Lenvo. Trust ax Lot 3536-0801) and to authorize the Mavor and Clerk toexecute said agreements and all other documents necessary to accept the Modification toEasement Construction Easemqnts; and with advice of counsel to waivecontingencies to close.

General Manager John Dietz reported to the Commission that staff is going to coordinatea watershed tour for the Commission this summer. It was mentioned that there may besome interest from City staff and Council as well, so they will be included in theinvitation.

There being no further business, the meeting was adjourn ed at 7:25 p.m

Prepared by: Presided by:

Trena McManus, Clerk Mayor & Ex-Officio Member of theWater and Light Commission

McMinnville Water & LighrCommission MeetingMay 15,2018