SPRINGFIELD UTILITY BOARD 223 A STREET, SUITE F SPRINGFIELD, OR MINUTES: May 9, 2018

Transcription

1 SPRINGFIELD UTILITY BOARD 223 A STREET, SUITE F SPRINGFIELD, OR MINUTES May 9, 2018 The regular session of the Springfield Utility Board was called to order by Chair Willis at 6:12 p.m. ATTENDANCE: Board: David Willis, Chair; John DeWenter, Vice Chair; Pat Riggs-Henson; Virginia Lauritsen; Mike Eyster - Absent. Staff: Jeff Nelson; Bob Fondren; Sanjeev King; Greg Miller; Cindy Flaherty; Mary Bridget Smith, Attorney for the Board. Others: Bill Belcher, SUB Budget Committee; Stephen Parac, XS Media; Matt Sayre, Technology Association of Oregon; Courtney Griesel, City of Springfield; Cole Griesel; Sanjana King. ACTION ITEMS: CONSENT AGENDA MINUTES: April 11 Special Session Board Meeting & April 11 Regular Board Meeting ACCOUNTS PAID: April 2018 BIDS/PROPOSALS: a. Award of Bid No , UG Primary Cable: The Electric Division staff recommends award of bid to Anixter/General Cable for the lowest bid meeting specifications for the amount of $69,880. (Exhibit A) b. Award of Bid No Conduit Install Aspen Ave. / Sequoia Ave.: The Electric Division staff recommends award of bid to Professional Underground services for the lowest bid meeting specifications for the amount of $85,940. (Exhibit B) c. Approval of FM2S R400 Meters/Firefly Meter Change Out/Sole Source 178: The Electric Division staff recommends purchase of additional meters to General Pacific in the amount of $90,000. (Exhibit C) d. Award of Bid No , Trucks, Drivers, and Rock for North System Transmission Project. The Water Division staff recommends award of bid to Delta Sand & Gravel in the amount of $229,020. (Exhibit D) * Pat Riggs-Henson motioned, and Virginia Lauritsen seconded, to approve the consent agenda, as presented. This motion CARRIED unanimously. BUSINESS FROM THE AUDIENCE: None.

2 Page 2 BUSINESS FROM THE BOARD: Additional Items: Board Policies Related to General Manager Virginia Lauritsen shared a brief update on the PNWS-AWWA Annual Meeting Just Add Water which she attended in Tacoma, Washington, April 25-27, She said it was a good operator type of meeting and encouraged all Board members to learn more about water operations. Jeff Nelson shared that SUB will be doing another round of vulnerability assessment in regards to emergency operations and disaster preparedness and it will address what is the vulnerability assessment for Springfield. Jeff Nelson shared that he spoke with Mary Bridget Smith regarding policy specific to the General Manager and wanted to present an opportunity to the Board to review proposed additional Board policy. He referred to Mary Bridget Smith s memo to the Board (Exhibit E), his follow up memo to the Board (Exhibit F), the GM Employment Agreement (Exhibit G), and the SUB Employee Policies related to conduct (Exhibit H), which were provided to the Board for review. Mary Bridget Smith explained that our society has seen some misconduct, in the last year or so, with higher level management -or high level people of organizations- and how different organizations have reacted to that. One thing she has advised clients in these types of issues is that when the Board or the entity is confronted with these types of situations that they are able to project to the public and to the media that we have very clear expectations as to what type of behavior is acceptable. The General Manager is subject to an employee contract that is different from the other employees in the organization, and the General Manager reports directly to the Board. It will be helpful if there is clear language in the Board policies and in the General Manager s contract. Ms. Smith included three options for potential language in her memo to the Board and reviewed each option with the Board. Mr. Nelson shared that there s need for more specific context in Board policy related to the conduct of the General Manager, to promote a strong Board and a strong General Manager. After discussion, the Board consensus was to align the Board

3 Page 3 policy and the General Manager s contract by adopting option #3 to SUB Board policy General Manager, with the addition of the word unlawful before the word bias in the last sentence of the first paragraph of option #3. In addition, Board consensus was to align the General Manager s employment contract language to be consistent with the Board policy, and to have specific language in the General Manager s employment contract about nepotism and fraternization, and also an acknowledgement that these policies have been changed, so the General Manager understands that they are held accountable to these policies. Board Policy that Applies to Board Members Relating to Travel Awards Jeff Nelson revisited the proposed Board policy related to travel awards. He explained that after previous discussion with the Board, SUB has now formalized the ability for individual Board members to have a SUB issued credit card which can be used for travel expenses. He said that this would be an opportunity if the Board wishes to move forward with consideration of the proposed Board policy related to travel awards. * John DeWenter motioned, and Pat Riggs-Henson seconded, to adopt the proposed modification to Board policy under Section Board Travel Policy, as presented (Exhibit I). This motion CARRIED unanimously. BUSINESS FROM THE GENERAL MANAGER: Report on SUB s Financial Analysis Jeff Nelson introduced SUB Finance Director Bob Fondren to share a follow up report to SUB s annual audit. Mr. Fondren referred to his overheads (Exhibit J) and shared an analysis of SUB s financial position and strength. He explained that said financial information is communicated to the Board several times throughout the year. Some examples are; budget results and rate predictions, cash flow analysis, monthly financials included in monthly Board packets, and quarterly financials also included in the Board s packets, which are also provided to the Budget Committee. In April, Moss Adams gives an audit presentation which is a second party look at our processes and accounting systems.

4 Page 4 Mr. Fondren reviewed residential electric rate comparisons for February 2018, various measures of financial strength, and equity to rate revenue. SUB is the only debt free utility compared to other utilities in the region. SUB has maintained cash balance, increased plant, and had a fairly modest increase in sales over the past five years. He shared how SUB s excess cash is invested: CD s and bank deposits covered by FDIC insurance ($10.7 million), Oregon State pool ($12.6 million), and bank certificates of deposit and cash accounts with collateralized banks ($10.3 million), for total cash and investments ($33.6 million). SUB has shown strong financial results and excels in all three parts of the financial three leg stool: rate revenue, level of debts to assets, and delivery system maintained and improved upon. Rates are extremely competitive, SUB has no debt to outside parties and an excellent cash position, and SUB has done considerable additions to its infrastructure and maintained its system well. He added that SUB has enough cash to fund operations and capital expenditures for almost six months. Additional Items General Manager Nelson explained that with regards to budgeted ending working capital for 2018, there were some items that impacted that number that were not budgeted. He shared brief updates on those items, as follows: Update on Property Purchase Mr. Nelson explained that one of the non-budgeted items was a recent property acquisition and referred to his Memo to the Board (Exhibit K). Bonneville Power Administration Spill Surcharge He referred to his Memo to the Board (Exhibit L) regarding potential impact of the mandatory Spill that Bonneville has to do for fish operations, and the potential impact to SUB. Updated numbers were received regarding the Spill impact and instead of the range provided to the Board that was based on a $40 million net cost to Bonneville, passed on to its customers; it is closer to $10 million. SUB s official estimated cost associated with the required mandatory Spill is about $190,000 for this calendar year. Reorder of Agenda Items Jeff Nelson wanted to address the agenda item on the 16 th and Q Street Property later in the meeting, so that the City s Economic Development Manager Courtney Griesel could be present for that discussion.

5 Page 5 Request for $1 million in Funding for Last Mile Connected Cluster Telecommunication Projects Mr. Nelson shared that he provided a Memo to the Board (Exhibit M) and explained that there have been conversations consistent with the Springfield Telecommunications Enhancement Project. He said there s been some things happening within SUB, in terms of making our process better. We ve looked at updating contract language, service standards associated with middle mile fiber (the fiber we have around our telecommunications system that SUB controls and leases to third parties), and we ve been working with wireless providers. We have a small cell wireless contract ready to sign with a provider, however the provider is working through securing a franchised license agreement with the City; but once that s secured, Mr. Nelson feels that the wireless provider will opt to sign the agreement with SUB. He added that this would be for a small cell wireless system that s at the top of a SUB owned pole. He further explained that typically, within the pole attachment regime, there s an electric space, a power line space, and below that is the telecom space, but that s typically wired connections spanning poles; and with these wireless facilities they can t be in that traditional telecom space, so they are at the top of a SUB pole. SUB is the only one who can maintain that wireless facility since it is above the power space on the pole. Mr. Nelson said that he would like to explore the Board s interest in providing some last mile connectivity to end users and in having long term public ownership of those facilities so there s no third party ownership that might create a barrier down the road to allow for competition. He would like to know if the Board would be supportive of $1 million in last mile investment in opportunities in which SUB would broadcast that to any internet service provider. Essentially this would allow him some latitude to explore some projects and then potentially bring a project, that s specific, back to the Board for Board approval. SUB s real focus will be on passive infrastructure, fiber, and conduit as opposed to owning any electronics. He then briefly discussed the new 5G wireless which is the next generation technology with the Board. Jeff Nelson introduced Stephen Parac, with XS Media, who then shared current telecom models in the area and how these could

6 Page 6 be modeled and established in Springfield. Mr. Nelson also introduced Matt Sayre, with Technology Association of Oregon, who shared comment on a larger perspective with telecom models in general. After brief discussion, the Board consensus was to approve General Manager Nelson to move forward with the $1 million in funding for Last Mile Telecommunication Projects, as requested. Mr. Nelson introduced the City s Economic Development Manager Courtney Griesel, who then shared the City s perspective of how this might align with the City s vision. She said that infrastructure like fiber or internet has become as integral as water and electric services. The City has always been able to say that they have incredibly high quality utilities, at rates that are affordable, and this potentially new internet at high speeds is a huge asset to the City. They re excited to pilot this, and excited to see how it rolls out in one neighborhood and what it can look like as we build throughout in the community. Presentation on SUB s 16 th & Q St. Property and Water Supply Mr. Nelson gave a update on SUB s 16 th & Q Street property and water supply, and referred to his Memo to the Board (Exhibit N). He reviewed the general area of the 16 th and Q Street properties and pointed out that the City owns one lot and SUB owns two lots. SUB has a well identified as a potential source on this property, although there is no existing well, but it does show up on the wellhead Protection Program and Delineation Map that s approved by the state through a public process which involves the expertise of consultants. He explained that if SUB no longer wanted to have a well on this property, then SUB would have to go through a re-delineation process to remove that well from our Delineation Map. The City is looking for opportunities for properties within the city that could be used for limited income and low income housing. Mr. Nelson added that if the Board wished to not have a well at the 16 th and Q Street properties, then SUB would go through the redelineation process, and if that had a successful outcome, then the Board would still have to declare the property as surplus; and then that would allow a transaction to the City. SUB s Drinking Water Source Protection Coordinator Amy Chinitz provided a Memo to the Board (Exhibit O) which maps out some of the requirements associated with that process.

7 Page 7 Mr. Nelson noted that the City inquired if there could be housing developed on the property and still be able to potentially have a well on the property. Mr. Nelson explained that this was not allowed, as groundwater source requires a 100 foot radius surrounding it with no development of any housing around that well. He added that he is not asking for action from the Board at this time, but just wanted to update the Board about the circumstances around the 16 th and Q Street property, in case the Board does get inquiries from the City regarding this property. Discussion of Fiber Rate Process and Team Springfield Fiber ADJOURNMENT: Jeff Nelson shared a brief status update on the fiber rate process and Team Springfield fiber. He asked for feedback from the Board on proposed rate changes on fiber service. Currently, there are some contracts that will expire soon. These are standard contracts for service by default. He explained that fiber is provided to TEAM Springfield agencies; the City of Springfield, Willamalane Park and Recreation District, and Springfield Public Schools. SUB currently provides these agencies with fiber strand around the ring that s currently not charged for. That was a decision made by the Board and that 20-year contract expires in Mr. Nelson referred to his Memo to the Board (Exhibit P), and noted that in his memo he provided examples of how SUB provides service with its rate structure and how other entities might provide service. The Board expressed a desire to give public entities a discount on fiber rates, as opposed to no charge. The meeting was adjourned by consensus at 7:44 p.m. David Willis, Board Chair ATTEST: Jeff Nelson, Board Secretary