EMERALD PEOPLE’S UTILITY DISTRICT BOARD OF DIRECTORS ... · EMERALD PEOPLE’S UTILITY DISTRICT...

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EMERALD PEOPLE’S UTILITY DISTRICT BOARD OF DIRECTORS

MEETING AGENDA

33733 Seavey Loop Meeting Time: 5:30 p.m. TUESDAY, DECEMBER 6, 2016 Eugene OR 97405

1. CONVENE BUSINESS MEETING - CALL TO ORDER – ROLL CALL – INTRODUCTIONS

2. AGENDA TIMELINE – Requests for Additions or Deletions

3. DEFERRED ITEMS 4. PUBLIC COMMENT

PLEASE NOTE: Statements from the public are limited to 5 minutes per speaker and are a comment period only on utility business, time permitting. The Board will not engage or respond to comments unless it is to correct inaccurate information or statements from the public. Interaction with the Board will be allowed if a member of the public has previously submitted a request to be added to the Agenda.

PRESENTATIONS AND REPORTS

6. FINANCE/TREASURER REPORT

7. GENERAL MANAGER’S REPORT

6:00 PM – PUBLIC HEARING ON RATE INCREASE IMPLEMENTATION

ITEMS FOR ACTION

Items placed on Consent Agenda are of a routine nature. Board will vote on the Consent Agenda without discussion. Items requested by any Board Member for discussion will be acted on separately. 8. CONSENT AGENDA Minutes of Board Meeting – November 8, 2016 Minutes of Board Work Session – November 22, 2016 Approval of Claims 9. MOTIONS AND RESOLUTIONS

Action Item 16-23 / Resolution 2016-12 - Adoption of 2017 Rate Increase Implementation Action Item 16-24 /Resolution 2016-13 - Approval of New Industrial Rate Schedule

Action Item 16-25 - Approval of Purchasing Policy Manual Updates Action Item 16-26 - Approval of Personnel Policy Manual and Healthcare Updates

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INFORMATION AND PLANNING ITEMS

10. REVIEW OF MOTIONS

11. PUBLIC COMMENT – Open Comment Period (if time permits)

12. SUGGESTED ITEMS FOR FUTURE MEETINGS

13. UPCOMING MEETINGS/EVENTS Thursday, December 8 PPC Annual Meeting ........................................ Sheraton – Portland Airport ............... 8:30 am-1 pm Tuesday, December 13 Creswell Chamber ........................................... varies ................................................... Noon Wednesday, December 14 Fern Ridge Chamber ........................................ Our Daily Bread ................................... Noon Thursday, December 15 Tri-County Chamber ........................................ varies ................................................... Noon Thursday, December 15 Cottage Grove Business After Hours ............... varies ................................................... 5:30 pm Wednesday, December 21 Coburg Chamber ............................................. Countryside Fellowship ...................... Noon Wednesday, January 4, 2017 PPC Members Forum ...................................... Sheraton – Portland Airport ............... 3-5:00 pm Thursday, January 5, 2017 PPC Executive Committee ............................... Sheraton – Portland Airport ............... 8:00 am-noon Tuesday, January 10, 2017 EPUD Board Meeting ................................... EPUD ............................................... 5:30 pm Friday, January 20, 2017 OPUDA Board Meeting.................................... SDAO - Salem ...................................... 9:30 am-1 pm Tuesday, January 24, 2017 EPUD Board Work Session ........................... EPUD ............................................... 5:30 pm 14. DIRECTORS’ CONCLUDING COMMENTS 15. ADJOURN MEETING

EMERALD PEOPLE'S UTILITY DISTRICT Board of Directors' Meeting November 8, 2016 Minutes Convene President Schacht convened the meeting at 5:29 pm at the Emerald offices, 33733

Seavey Loop Road in Eugene. Attendance and Introductions

Directors: Ron Davis, Penny Jordan, Lee Kelley, Kevin Parrish, and Katherine Schacht. Staff: Doug Barab, Sara Cline, Scott Coe, Ron Dubbs, Brian Johnson, Kyle Roadman, Alice Schroeder, and Beth Matthews. Guests: Laurie Smart, Robert McKuhn, and Rob McOmie – ratepayers.

Agenda Timeline There were no deletions from the agenda. Director Jordan asked to add an agenda

item to this evening’s agenda related to the Ethics Commission. Director Parrish

asked to discuss matching a Personnel Policy Manual item to one in the Board

Policy Manual. His request will be discussed at the November 22 Board meeting.

Deferred Items None.

Public Comment None.

Q3 2016 Budget Review

Information on the Q3 2016 Budget Reports was sent in the agenda packet. Coe said there was a big improvement since the second quarter. We're now at $91,000 to the worse which is way better than at the end of the second quarter. Bottom line, we're way closer to budget than anticipated. We hope for a more balanced budget by the end of the year. Coe spoke briefly about Bonneville and how load following customers take the hit for secondary revenues. Bonneville is projecting they are $183 million lower than what they thought their bottom line would be through the end of their fiscal year ending in September. Now we'll track 2017 and see where that goes, said Coe.

Finance and Rate Committee Recommendations

Rob McOmie, Chair of the Citizens Advisory Committee on Finance & Rates, presented the committee’s recommendations to the Board. Overall, he said the Committee felt the 2017 budget was reasonable, with spending levels appropriate to current revenues. The proposed 3% rate increase was discussed and generally, the group felt it was consistent with the utility’s approach of small, but frequent increases. McOmie further went on to say that the staff-proposed budget of $51,055,443 was approved for recommendation to the Board by a unanimous vote of the Committee. The Committee defers to staff for suggestions on other expenses throughout the year, pending Board approval. McComie wanted to thank his fellow Committee members for allowing him to serve as their Chairman and that he wanted to thank the Board for their continued support for involving the customer-owners of Emerald PUD in the details of the utility’s operation.

Emerald PUD Minutes – November 8, 2016

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Director Parrish inquired whether there had been any discussion around the 1.8% COLA. McOmie said the Committee felt it was within limits and made sense. Director Davis asked if there had been any discussion by the Committee around sustainability. McOmie said the Committee talked a bit about ongoing increases and where that would eventually end. It always comes back to when the bonds are paid off. Without doing smaller increases for capital projects, we'll end up getting behind on parameters set by the Board. McOmie went back to what the Committee's recommendation at their prior meeting had been on the tiered rate structure. It would encourage customers who are higher users to reduce their power bills. Director Davis also asked if there was any discussion about the basic charge (Electric System Charge) going up. McOmie said EPUD is still below what other utilities are paying but we still need to get closer to the COSA. Coe said 90% of the COSA findings would equate to a $35 Electric System Charge. We're currently at $23. Most customers are receptive to the smaller increases. Newer technology will also help ratepayers control some of those costs. Director Jordan asked if there was a Committee discussion about dipping into reserves to reduce rate increases. McOmie said there wasn't any discussion about dipping into that to reduce the rate, but there was discussion about our ability to retain our credit worthiness and the parameter of 150 days of cash on hand. The Committee did talk in depth on that. What it came down to was that with low interest rates, it made more sense for the utility to be able to go out and get credit if needed rather than dipping into reserves. Coe mentioned that at a previous Board meeting when we re-did the Board financial parameters, we didn't put a line of credit into the policy. We'll talk again about the financial parameters and doing a line of credit. The idea would be that we would not draw on the line of credit but rather have it available when we do need it. McOmie said the Committee thought hard about this, giving the example of how a major storm and/or other incident(s) would draw on the budget. Director Davis asked if there had been any discussion about PakTech. McOmie said there was brief discussion about the increase in industrial revenues. In response to Director Schacht’s question about how he felt about his role in the Committee meetings, McOmie said it was a pleasure to serve on the Committee. Director Parrish asked if McOmie thought it easier to get concepts across to people on the Committee in the combined format. McOmie said it was nice to have a slightly different point of view by combining the committees this year. That's why he thinks there was more discussion as well. He said he thought it was a good idea to combine the two committees. Director Parrish asked how staff felt about the combined committees. Roadman said he thought it went well. Coe said people on the Committee spoke up which he wasn't sure would happen. Director Parrish said his committee members were excited about the process. Coe said the committee members did their homework and came in prepared--both on the COSA discussion and on the budget. He said he thought the group did a good job working through different perspectives. The Board thanked McOmie for his presentation and report.


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Public Hearing on Proposed 2017 Budget

The Public Hearing on the Proposed 2017 budget was convened at 6:00 pm. Laurie Smart spoke briefly, saying that she was on the Finance & Rates Committee, but that these are her personal thoughts. She said she was on the fence about the 3% rate increase. She expressed concern about that based on the cash reserves. When we pay off the debt, our rates are going to be considerably higher and feels there will be a "cliff" there. She said she appreciates that management is looking ahead to that. For her, it is not worth rocking the boat at this point. She hopes that next year it could be looked at more, and not doing another rate increase. Smart expressed concern about rate increases funding capital projects, which is asking current ratepayers to fund future projects. The Public Hearing was closed at 6:03pm.

Proposed 2017 Budget – Board Review and Discussion

Director Parrish said he had one question about what was on the material in the agenda packet. We prepared a budget with a COLA and one without. He said he thought it would be more of a decrease for the one without the COLA. Coe said in part it is due to employees who charge time to capital work orders, because some people hit the cap for paying into Social Security withholdings. Director Jordan thought Robert McKuhn had a good idea about the lack of increases to the low income program. She said this would fit the purpose that she had a mind anyway--vote for no COLA ($160,000) and then use the money instead for support of additional funding for low income. Director Kelley said he supported the COLA. Director Davis said you need to look at what the market is on wages and that perhaps we can look at some other ways to help fund low income programs. He said he doesn't think it's going to help the utility if we have employees walk out. Director Schacht asked what we currently pay out for low income. Cline indicated that was shown on line 52 of the material in the memo--$197,685. Director Parrish said he would vote to pass the budget without the COLA. He thinks our tiered rate structure will help more and that we are already doing fine on our low income assistance.

Action Item 16-22 / Resolution 2016-11 – Approving the 2017 System Operating Budget Motion Vote

Director Jordan/Director Parrish moved to approve the 2017 System Operating Budget without the proposed 1.8% COLA. Yes: Director Jordan, Director Parrish. N0: Director Schacht, Director Kelley, Director Davis. The motion failed.


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Motion Vote

Director Kelley/Director Davis moved to approve the 2017 System Operating Budget as presented. Yes: Director Davis, Director Kelley, Director Schacht. No: Director Jordan, Director Parrish.

Finance/ Treasurer’s Report

The Accounts Payable Check Register for the period from October 1-31, 2016 was reviewed and discussed. Staff clarified several expenditures for the Board. There was some discussion about community solar and the status of the project. Director Schacht asked for a total on OPUDA costs, including registration, and annual dues (which Cline stated were $37,694 for 2016). Director Parrish pointed out that our dues will go down if Clatskanie PUD rejoins. The Board said they appreciated the extra work MeriAnne Moore is doing on the breakdown of AmEx charges.

General Manager’s Report

Coe distributed his General Manager’s report and reviewed the contents for the Board. He said he wanted to thank Cline, Dubbs, and MeriAnne Moore again for the FEMA reimbursement--especially MeriAnne--in addition to the work they did to complete the required Hazard Mitigation Plan. A follow-up on purchasing was included in Coe’s report related to tires, fuel, and what Duraline actually is. We ended up in better shape than expected during the weekend storm in mid-October due to work we've done on system improvements and tree trimming. Coe said this was a good test of our system and the upgrades we have done. Rob Currier has received recognition through NWEC as a “Clean Energy Leader” due to him being instrumental in software development being used. Coe talked about our older fleet which is nice to get out of the yard. We definitely got our money's worth by selling outside of the Lane County auction this year. Coe itemized some fleet replacement costs if legislation around fuel type is passed. Coe said he will be ready to travel to Salem to testify about the costs involved to our customers if we had to replace that portion of our fleet. He said he had spoken to Shop Foreman Mike Terry about the clean diesel engines and the cost of maintenance we're experiencing. He is doing some research with other utilities on their experience and their maintenance efforts to gather more information. Coe indicated he had been asked to speak at the WAPUDA annual meeting about BitCoins. The meeting will be held November 30-December 2 and the Board approved him attending the remainder of the event in addition to speaking.


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A list of upcoming meetings was reviewed. There will be a PPC roadshow held on November 18 in Eugene. The proposed agenda for the November 22 Board meeting was reviewed and approved along with the proposed December 6 Board meeting agenda.

Addition to Agenda Director Jordan indicated that she had filed an ethics complaint against herself and Director Schacht for a meeting in early 2015 when they voted to remove the sanctions from the two of them. The Ethics Commission has moved to investigate further, having up to 180 days to do an investigation. Other Board members who participated in that vote will likely be contacted.

Consent Agenda Motion Vote

Director Davis/Director Kelley moved to approve the Consent Agenda. Unanimously approved.

Directors’ Concluding Comments

Director Jordan said she was disappointed about the COLA, but it's her last hurrah as a Director. Overall, the meeting went well, though. Director Parrish commented on the OPUDA conference, which he thought went well. The venue for the dinner was cool. There were good, timely topics. Maybe there will be more cooperation across the utilities to put these conferences on. Director Kelley said he was happy with the budget we passed. He said he had also enjoyed the OPUDA conference. Director Schacht enjoyed the OPUDA dinner venue as well. She enjoyed touching the "little animals" at the aquarium. She thanked everyone for a respectful meeting tonight and that she appreciated all the work staff has done on the budget.


Suggested Items for Future Meetings

None, other than those discussed during the meeting.

Upcoming Meetings/Events

A list of upcoming meetings and events was included on the Agenda.

Adjournment

President Schacht adjourned the Board meeting at 6:51 pm. Minutes prepared by Beth Matthews, Executive Assistant.

EMERALD PEOPLE'S UTILITY DISTRICT Board of Directors' Work Session

November 22, 2016 Minutes Convene President Schacht convened the meeting at 5:30 pm at the Emerald offices, 33733

Seavey Loop Road in Eugene. Attendance and Introductions

Directors: Ron Davis, Penny Jordan, Lee Kelley, Kevin Parrish, and Katherine Schacht. Staff: Doug Barab, Alicia Burgess, Sara Cline, Scott Coe, Ron Dubbs, Brian Johnson, Kyle Roadman, Alice Schroeder, and Beth Matthews. Guests: Mark Cosby, Emma Higley, Brandon Jordan, Robert McKuhn, Brian Parker, Laurie Smart – ratepayers; Lucas Lystra, interested party.

Agenda Timeline There were no deletions from the agenda. Director Davis asked to add an item to

the agenda regarding elections.

Addition to the

Agenda

Director Davis said he had received call from Emma Higley regarding elections.

Higley attended the meeting to present materials related to ORS 261.405(3).

Under this statute, Higley claimed that Brandon Jordan was not qualified to serve

as an EPUD Board director. She distributed information to the Board outlining

her claim. She referenced two sources—the Oregon Revised Statutes and

Emerald’s Board Policy Manual—throughout her presentation. ORS 261.405

states that Directors shall be electors, shall reside in the subdivision from which

they are respectfully nominated and elected, and shall have resided in the district

continuously for two years immediately preceding the date of their election as

directors. She further went on to list information which she believed to be

pertinent to her claim.

Higley asserted that the Board must remove the “unqualified director” and the

position be declared vacant as per ORS 261.405(3). Director Schacht said she

believed the material presented by Higley was very clear and that she would ask

the Board for a vote on this. She asked for a motion to declare the seat vacant and

would order staff to immediately go and advertise for this position. Director

Parrish said he believed that we need to wait until after November 28, when the

election is certified. Director Parrish said we need to have a real legal opinion on

this before any action is taken and that we would need to have the certified

election results before we moved ahead with any action. Director Jordan noted

how there were two sides to the issue and it seemed wrong to make a decision

tonight without all of the information and a legal review.

Higley again spoke to what she believed to be Brandon Jordan's ineligibility. She

said the law is very clear. “It's black and white.” Higley stated that she is willing

to go to a judge to get an injunction, if necessary. Again, Director Parrish said he

Emerald PUD Board Minutes – November 22, 2016

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Motion

Vote

did not understand why we're in a hurry to make such a hasty decision. He said he

felt this was dishonest and unfair to do this with a vote tonight.

Director Davis/Director Kelley moved to send this issue to legal counsel to get an

opinion.

Yes: Directors Davis, Jordan, Kelley, and Parrish.

No: Director Schacht.

Director Parrish stated he believed we needed to wait to make a more informed

decision after the election results are certified and to make a thorough review of

the purported allegations. He said there was no urgency to get this done tonight.

Director Parrish said we need to take the time to do this right. He said the people

have spoken in this election. The problem here is a personal vendetta and we

need to make a fact based decision in this matter.

Coe was given direction by the Board to confer with legal counsel at Cable

Huston.

Public Comment Brandon Jordan spoke, saying that he did meet with Lane County Elections twice before he ran for the seat. He asked specifically about his situation. He gave them bank statements, employment forms, Amazon orders, and letters from his parents. He was told by the Elections Division that he was okay to run when he brought all this documentation in to their office. Laurie Smart said she wanted to make one suggestion about the rate schedules. Once the debt is paid off, we're going to be able to lower rates. She said she would suggest postponing the basic charge increase to $26.75 until we don't have to raise rates.

Rate Schedule Changes

Coe indicated that an explanatory cover memo was included with the agenda packet. Because of moving to the tiered rate approach, we wanted to have more time to communicate with our customers and spread the word of the changes. He indicated that staff hopes to have the Board vote on this at the December 6 Board meeting. The proposal had previously been vetted with the Finance and Rates Committee. We had a lot of conversation around this. Based on the Committee’s recommendation to continue with small, but regular increases in the electric system charge, the rate proposal assumes a move from $23.00 to $26.75 for Residential customers in order to achieve the 3% rate increase. Part of the strategic plan, as well, is to move this direction. This change in the rate will imbed the 3% rate increase in the monthly charge. Director Davis stated his concern about making sure we continue to have rates below those of Pacific Power and Light and wants to make sure that our customers understand this. He said the employees at the Customer Service desk need to be very educated about how to explain this to customers.


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Director Parrish said there is a line between 1800 kWh and 1900 kWh usage and that he liked this structure. He said he has been a fan of getting the basic charge up to cover the costs of our overhead. To assuage Director Davis’ concerns, Coe distributed monthly bill comparison information, showing results from the 2016 COSA. This showed average monthly bill comparisons as well as residential fixed charges. At the December 6 Board meeting, we'd like to have the vote so Coe would entertain any additional conversation tonight. As Roadman noted, we are able to use our existing system to implement the tiered rate structure. He said the transition is nice and easy to couple the basic charge increase and the tiered rates. Many customers will experience a decrease in their bills, Roadman said.

New Industrial Rate Schedule

Roadman presented this follow-up information for the new manufacturing customer in Cottage Grove. It’s time that we develop a rate for them. We expect that in January they will increase their load to an industrial rate. The rate is a bit higher than it would normally be to account for the potential new infrastructure. It’s in line with what our other industrial customers pay. It's very well vetted through EES to make sure we get it right, said Coe. Roadman said we're glad to know the rate that came in is fairly close. Coe talked about policies for new large loads. Roadman said this new company is the fourth customer subject to the policy we put into place a few years ago for new large loads. Coe said the Slice product gives us some flexibility. Coe indicated that after the first of year, staff will do some additional graphics to show how kilowatt hours and kilowatts interact to help clarify the industrial load information for the Board.

Purchasing Policy Coe talked about how this policy review was previously brought in to the Board. The remaining question was whether the Board wished to propose different dollar amounts. Director Parrish said he had had the question on what the limits were. The fact that they are based on state purchasing guidelines was enough of an explanation for him as to the basis for the limits. Coe indicated that this item will be brought back into the next Board meeting for a vote on the policy.

Personnel Policy Staff had talked with the Board about retiree health care benefits at the October 25

th meeting. Coe reiterated that the whole package is how we contain costs for

both current employees and retirees. The information presented is what the Employee Benefits Committee recommended on cost containment. Coe encouraged the Board to determine if this makes sense both for retirees and current employees. Schroeder said the proposed changes to Emerald’s healthcare plan has nothing to do with the Board stipend, but has to do with health care plan. She said that five changes have been proposed on the health care plan. In addition, we are also proposing a different status for retirees—having two tiers of retirees. Tier 1 would be for employees hired before 1/1/2017. They would be eligible to pay 50 percent of appropriate premium until Medicare age or accept a stipend based on 55 percent of the appropriate premium to purchase another plan.


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Tier 2 would be for employees hired after 12/31/2016 and they would pay 100% of the premium or receive a stipend based on 55 percent of the appropriate premium to purchase another plan. The COBRA Act determines the premium and this can change year to year. Currently, that is $1200/month for a single and $2,500/month for a family. Again, this would end when participants become Medicare eligible. Director Parrish said he appreciates the efforts of the Employee Benefits Committee and their proposal for changes. He supports keeping the plan as whole as we can but also recognizing the higher medical costs. Schroeder reviewed the remainder of the proposed plan changes: annual out-of-pocket maximums, massages and chiropractic co-insurance and capping the numbers of visits per year, co-insurance for substance abuse/psychiatric care, prescription changes for maintenance drugs, and co-pay for emergency room visits.


Board Comments Director Schacht talked about her opinion on the need for legal counsel as soon as possible as we need to get some closure on the election issue. Director Parrish said he felt there was absolutely no reason to make haste on what Director Schacht is trying to do here. He said he wants the attorney to look at the facts. To be fair, Brandon Jordan needs to have an opportunity to present his side as well as time for Lane County Elections to provide the certified election information.

Adjournment

President Schacht adjourned the Board meeting at 6:38 pm. Minutes prepared by Beth Matthews, Executive Assistant.

Action Item 16‐23 To: Board of Directors From: Scott Coe Date: December 6, 2016 Re: Rate Adjustment Proposal

Discussion As discussed previously, Staff recently completed a two‐month process with Emerald’s Citizen

Advisory Committee on Finance and Rates to examine both our rate structure and the 2017

budget. After hearing the Committee’s recommendations, the Board approved a new tiered

rate structure for Residential customers at its meeting on October 11th. The Board also

approved the 2017 budget, which assumes a 3% rate increase, at its meeting on November

8th. The final step in this process is to adopt new rate schedules that implement each of these

features. Staff shared the attached proposal at the Board workshop on November 22nd, and

is now seeking final approval from the Board. The analysis presented at the last meeting has

also been attached for reference.

Action Request Requesting Board approval of attached Resolution 2016‐12, adopting rate schedule

adjustments to be effective April 1, 2017.

Emerald People’s Utility District

Resolution 2016-12 A Resolution Adopting Price Changes to be Effective April 1, 2017

WHEREAS, Emerald People’s Utility District is required to adopt price schedules for billing purposes; and WHEREAS, after a public hearing on December 6, 2016, the Board of Directors finds it necessary to adopt new price schedules; and

WHEREAS, ORS 261.465 vests in the Board of Directors the right and duty to fix and adjust prices; and

WHEREAS, the assumptions used in the 2017 budget predict total annual rate revenue will need to be increased by an additional 3% in April 2017. WHEREAS, the Emerald Citizen Advisory Committee on Finance and Rates has reviewed the current rate structure of Emerald People’s Utility District and made recommendations to obtain this additional revenue by increasing billing determinants within each customer class, including the electric system charge. NOW, THERFORE, BE IT RESOLVED that the Emerald People’s Utility District adopts increases from the May 1, 2016 price schedules of approximately 3% in revenue requirements. The price adjustments are effective April 1, 2017. Approximate average class changes are: Residential +3.0%, Commercial-type +3.0%, Industrial +3.0%, Irrigation +3.1.0%, and Lighting +3.0%. The increase will be applied as shown in the attached proposal, including a $3.75 increase in the electric system charge for Residential customers, with other customer classes adjusted in the same proportion, excluding those with demand charges or those whose Electric System Charge exceeds the 2016 Cost of Service Analysis (“COSA”). The remaining increase will be distributed to the other charges (Energy, Demand, and Distribution) using the 2016 COSA to bring the total average increase for each class as close as possible to 3.0%. ADOPTED by the Board of Directors of Emerald People’s Utility District at its meeting on December 6, 2016.

By: __________________________________ Katherine Schacht, Board President

ATTEST: ___________________________ Beth Matthews, Board Secretary

Votes of the Directors: Yes No Abstain

Schacht

Davis

Kelley

Parrish

Jordan

2017 Rate Adjustment Proposal

Basic Energy Demand Dist. Basic Energy Demand Dist. Increase

Residential

4 & 4a (Tier 1: <=600 kWh) $23.00 $0.0796 ‐ ‐ $26.75 $0.0696 ‐ ‐ 3.05%

4 & 4a (Tier 2: 601‐1,800 kWh) $0.0796 $0.0796

4 & 4a (Tier 3: >=1,801 kWh) $0.0796 $0.1089

Total Residential 3.05%

Irrigation

41 (1ph) $23.00 $0.0878 ‐ ‐ $26.75 $0.0836 ‐ ‐ 3.67%

41T (3ph , < 30 HP) $28.75 $0.0653 ‐ ‐ $33.44 $0.0642 ‐ ‐ 3.05%

41U (3ph, > 30 HP, < 60 HP) $74.75 $0.0653 ‐ ‐ $86.94 $0.0642 ‐ ‐ 3.41%

41V (3ph, > 60 HP, < 120 HP) $97.75 $0.0653 ‐ ‐ $113.69 $0.0642 ‐ ‐ 2.03%

Total Irrigation 3.15%

General Service

25 (1ph, < 50 kW) $23.00 $0.0878 ‐ ‐ $26.75 $0.0883 ‐ ‐ 3.06%

25E (Education) $23.00 $0.0796 ‐ ‐ $26.75 $0.0817 ‐ ‐ 3.00%

25S (1ph, > 50 kW) $70.15 $0.0725 $5.08 ‐ $70.15 $0.0725 $5.81 ‐ 2.56%

25T (3ph, > 50 kW) $70.15 $0.0725 $5.08 ‐ $70.15 $0.0725 $5.81 ‐ 3.14%

25U (3ph, < 50 kW) $23.00 $0.0878 ‐ ‐ $26.75 $0.0893 ‐ ‐ 3.01%

Total General Service 3.02%

Industrial

Nov‐Jan $207.00 $0.0349 $4.83 $0.0348 $207.00 $0.0349 $5.72 $0.0351

Feb‐Jun $207.00 $0.0261 $3.77 $0.0348 $207.00 $0.0261 $4.47 $0.0351

Jul‐Sep $207.00 $0.0283 $4.44 $0.0348 $207.00 $0.0283 $5.26 $0.0351

Oct $207.00 $0.0336 $4.49 $0.0348 $207.00 $0.0336 $5.32 $0.0351Total Industrial 3.03%

Lighting

51 $0.00 $0.2035 $0.00 ‐$ $0.00 $0.2096 $0.00 ‐$ 3.00%

54 $23.00 $0.0796 $0.00 ‐$ $26.75 $0.0801 $0.00 ‐$ 3.15%

Total Lighting 3.01%

Grand Total 3.05%

Notes:

4. The analysis uses estimates included in forecasts to predict the balance of the current year and residential customer behavior in a

3‐tier rate environment.

5. Changes to rates would be effective April 1, 2017.

3. Across all classes the rate increase nets to 3%, however some individual rate schedules are lower or higher based on a variety of

factors. These include number of customers/kWh, relative size of the basic charge to usage, etc.

1. The proposed rates reflect increases in the basic charge depending on class. Other billing determinants were increased (Energy, Demand,

Distribution) commensurate with the most recent COSA as needed to bring the total average increase for each class as close as possible to 3.0%.

Current Rates Proposed Rates (effective 4‐1‐17)

2. The distribution charge for Industrials is a simple average, as each customer has their own unique charge.

2017 Rate Adjustment Proposal Explained

Staff worked with a third‐party consultant over the summer to perform a Cost of Service Analysis (COSA) and rate design study. The COSA results were presented to the Board on September 27th and have been attached to this document for reference. Overall, the analysis shows that rates for most classes look appropriate (within about 10%). However, the electric system charge remains out of alignment, with Residential almost $15 below cost of service. Based on the Finance and Rate Committee’s recommendation to continue with small but regular increases in the electric system charge, the rate proposal assumes a move from $23.00 to $26.75 for Residential customers in order to achieve the 3% rate increase. Non‐Residential customers will also see an increase in the electric system charge, in the same proportion as that of Residential customers. These customers will also see a usage charge increase as necessary to achieve an overall 3% increase for each class. The exceptions are the Large Commercial‐Type and Industrial classes that are assessed a demand charge. These customers will see an increase in the demand charge rather than the usage charge in an effort to move these rate schedules closer to cost of service. Please note that no inter‐class adjustments are proposed at this time despite the fact that some imbalances exist, such as Irrigation rates remaining far below actual cost of service. The Finance and Rates Committee agrees with making changes to correct these imbalances, but felt doing so now would create too many moving parts. Staff is also concerned about making too many changes all at once, but would like to revisit this issue in 2017. As shown on the attached proposal, the rate increase nets to 3% overall across the entirety of our customer classes. However, some individual rate schedules are slightly lower or higher based on a variety of factors. These include the number of customers/kWh, relative size of the basic charge to usage charges, etc. Along with the electric system charge increase, the proposal calls for a three‐tiered rate structure for Residential customers, as recommended by the Finance and Rates Committee. A tiered, or inverted block, rate structure was envisioned in Emerald’s Strategic Plan as a means to offset the effect of electric system charge increases, maintain a conservation incentive, and provide customers control over their bill. The proposed tiers include a “lifeline” rate from 0 – 600 kWh that is $0.01/kWh less than our current rate, a “status quo” rate from 601‐1,800 kWh that is equal to our current rate, and an “incentive” rate over 1,800 kWh that is roughly equal to the average rate of our predecessor. Moving to this tiered rate structure will lessen the rate increase impact for most Residential customers, a majority of whom use less than 1,800 kWh per month. For the average customer using 1,300 kWh, the monthly bill will actually decrease from $126.48 to $124.23, despite the higher electric system charge. Analysis of bill impacts for a range of usage levels is attached.

Cost of Service Results by Rate Class

Cost of Service Results: Electric System Charge

Customer ClassPresent Rate

Revenues

Revenue

RequirementVariance

Average Rate

Increase (Decrease)

Residential 26,815,405 26,985,178 (169,773) 0.63%

Commercial Type Single <50 kW 2,093,745 1,941,650 152,095 ‐7.26%

Commercial Type Single >50 kW 178,082 164,457 13,625 ‐7.65%

Commercial Type Poly <50 kW 1,392,762 1,240,358 152,404 ‐10.94%

Commercial Type Poly >50 kW 3,550,899 3,539,590 11,309 ‐0.32%

School Service 559,588 551,503 8,085 ‐1.44%

Irrigation Single 62,561 90,024 (27,463) 43.90%

Irrigation Poly 509,574 996,881 (487,307) 95.63%

Lighting 106,933 145,311 (38,378) 35.89%

Industrial 4,012,674 3,554,066 458,608 ‐11.43%

Total 39,282,223 39,209,018 73,205 ‐0.19%

Customer ClassPresent Rate

Revenues

Revenue

RequirementVariance

Average Rate

Increase (Decrease)

Industrial Customer 1 1,448,571 1,275,593 172,978 ‐11.94%

Industrial Customer 2 124,092 178,373 (54,281) 43.74%

Industrial Customer 3 866,240 715,241 150,999 ‐17.43%




Total 4,012,674 3,554,066 458,608 ‐11.43%

Class Rate Schedule Present COSA Variance 90% COSA Variance

4 & 4a $23.00 $38.70 ‐$15.70 $34.83 ‐$11.83

4s $12.30 $38.70 ‐$26.40 $34.83 ‐$22.53

Single Phase, < 50 kW $23.00 $38.70 ‐$15.70 $34.83 ‐$11.83

Single Phase, > 50 kW $70.15 $38.70 $31.45 $34.83 $35.32

Three Phase, < 50 kW $23.00 $47.30 ‐$24.30 $42.57 ‐$19.57

Three Phase, > 50 kW $70.15 $54.47 $15.68 $49.02 $21.13

School Service 25E $23.00 $47.30 ‐$24.30 $42.57 ‐$19.57

Single Phase $23.00 $38.70 ‐$15.70 $34.83 ‐$11.83

Three Phase $33.99 $46.97 ‐$12.98 $42.27 ‐$8.29

Recreational Lighting 54 $23.00 $33.62 ‐$10.62 $30.26 ‐$7.26

Industrial 48 $207.00 $162.34 $44.66 $146.11 $60.89

* Three phase charge was analyzed in total rather than by rate class. These blended totals are included for reference.

Residential

Commercial‐Type

Agricultural / Irrigation *

Rate Adjustment Proposal Monthly Bill Impacts

kWh Used Current Bill New Bill Variance Var %‐ $23.00 $26.75 $3.75 16.3%100 $30.96 $33.71 $2.75 8.9%200 $38.92 $40.67 $1.75 4.5%300 $46.88 $47.63 $0.75 1.6%400 $54.84 $54.59 ‐$0.25 ‐0.5%500 $62.80 $61.55 ‐$1.25 ‐2.0%600 $70.76 $68.51 ‐$2.25 ‐3.2%700 $78.72 $76.47 ‐$2.25 ‐2.9%800 $86.68 $84.43 ‐$2.25 ‐2.6%900 $94.64 $92.39 ‐$2.25 ‐2.4%

1,000 $102.60 $100.35 ‐$2.25 ‐2.2%1,100 $110.56 $108.31 ‐$2.25 ‐2.0%1,200 $118.52 $116.27 ‐$2.25 ‐1.9%1,300 $126.48 $124.23 ‐$2.25 ‐1.8%1,400 $134.44 $132.19 ‐$2.25 ‐1.7%1,500 $142.40 $140.15 ‐$2.25 ‐1.6%1,600 $150.36 $148.11 ‐$2.25 ‐1.5%1,700 $158.32 $156.07 ‐$2.25 ‐1.4%1,800 $166.28 $164.03 ‐$2.25 ‐1.4%1,900 $174.24 $174.92 $0.68 0.4%2,000 $182.20 $185.81 $3.61 2.0%2,100 $190.16 $196.70 $6.54 3.4%2,200 $198.12 $207.59 $9.47 4.8%2,300 $206.08 $218.48 $12.40 6.0%2,400 $214.04 $229.37 $15.33 7.2%2,500 $222.00 $240.26 $18.26 8.2%

2,600 $229.96 $251.15 $21.19 9.2%

2,700 $237.92 $262.04 $24.12 10.1%

2,800 $245.88 $272.93 $27.05 11.0%

2,900 $253.84 $283.82 $29.98 11.8%

3,000 $261.80 $294.71 $32.91 12.6%

3,500 $301.60 $349.16 $47.56 15.8%

4,000 $341.40 $403.61 $62.21 18.2%

4,500 $381.20 $458.06 $76.86 20.2%

5,000 $421.00 $512.51 $91.51 21.7%

Action Item 16‐24 To: Board of Directors From: Kyle Roadman, Rob Currier Date: December 6, 2016 Re: New Industrial Rate Schedule (48N4)

Discussion At the Board Work Session on November 22, 2016, Staff presented a memo outlining the

requirement to establish an Industrial Rate Schedule for a new customer connecting to

Emerald’s system. This customer should exceed Emerald’s load threshold for industrial service

upon connection and is expected to further grow its demand for electricity at the site long‐

term. The customer will be placed on a new Industrial rate schedule that has been developed

for its exclusive use. This new rate schedule (48N4) is attached. If at connection customer

loads do not exceed the required minimum, then the customer will be added to our General

Service rate schedule and Rate Schedule 48N4 will be inactive.

Action Request Requesting Board approval of attached Resolution 2016‐13, approving Rate Schedule 48N4

for the new industrial customer.

EmeraldPeople’sUtilityDistrictResolutionNo.2016‐13

AResolutionAdoptingNewIndustrialRateSchedule48N4

WHEREAS,EmeraldPeople’sUtilityDistrict,EmeraldPUD,isaPeople’sUtilityDistrictservingcustomers

withcostbasedelectricservice;and

WHEREAS,EmeraldPUDisrequiredtoadoptpriceschedulesforbillingpurposes;and

WHEREAS,ORS261.465vestsintheBoardofDirectorstherightanddutytofixandadjustprices;and

WHEREAS,PakTech,anewelectriccustomerofEmeraldPUD,isexpectedtobeeligibletoreceiveIndustrialServiceundertheEmeraldPUDRateSchedule.

WHEREAS,theBoardofDirectorswishestoestablishanewpricetoapplycost‐baseddistributionandenergychargesforPakTech;and

WHEREAS,thestaffofEmeraldPeople’sUtilityDistricthasworkedwithanoutsideconsultanttocalculateacost‐basedratethattakesintoaccountallreasonablecostsofprovidingdistributionservice;and

WHEREAS,PakTechisexpectedtobeclassifiedasaNewLargeLoadcustomerunderEmerald’sNewLargeLoadPolicy,anditsenergyratewillbesubjecttoadjustmentbasedontheavailabilityofEmerald’slow‐costfederalpower;

THERETOFORE,BEITRESOLVED,theattachedRateSchedule48N4isadoptedforspecificassignmenttoPakTech.Theratescheduleshallbeeffectiveimmediately.AtanytimePakTechisanEmeraldPUDcustomernotclassifiedasanindustrialcustomer,theappropriateGeneralServicerateshallapplyandRateSchedule48N4shallbecomeinactive.

ADOPTEDbytheBoardofDirectorsofEmeraldPUDatitsregularmeetingonDecember6,2016.

BY: KatherineSchacht,BoardPresident

ATTEST: BethMatthews,BoardSecretary

VotesoftheDirectors: Yes No AbstainSchacht Davis Kelley Jordan Parrish

Action Item 16‐25

To: Board of Directors From: Scott A. Coe, General Manager Date: December 6, 2016 Re: Purchasing Policy Manual Updates

Discussion Pursuant to Board, Auditor, and Legal feedback, staff has completed a review of the District’s Purchasing Policy Manual. Staff’s objective is to have a policy that is understandable, reasonable, and actionable. A summary of the changes and a red‐lined version of the full policy including the proposed changes were provided to the Board with the October 25th agenda packet materials. Below are the highlights from the summary:

Section Proposed ChangeMultiple Establish purchasing authority levels for various types of purchases:

Board of

Directors

General

Manager

Purchasing

Agent

Department

Heads

No Quote ‐ $10,000 or less $10,000 or less $2,500 or less

Intermediate

Procurements

‐ $150,000 or less $150,000 or less $60,000 or less

Personal Services

Contract

$150,000 or

more

$150,000 or less ‐ Recommend

Formal Procurement

(Request for Proposals

or Invitation for Bids)

$250,000 or

more

$250,000 or less $150,000 or less Recommend

8. A. Purchases from Nonprofit Agencies for Disabled Individuals Currently, the District does not give preferential treatment to these agencies, so the section will be removed.

3325 District Vehicle PurchasePursuant to the goal for policy to be actionable, this section will be removed.

As with prior policy discussions, the Board may opt to make additional changes or bring in additional points for discussion. Staff may similarly present future requests of the Board as the proposed changes become practice.

Action Request Emerald Staff requests Board approval of the updates to the Purchasing Policy Manual as

presented.

Action Item 16‐26

To: Board of Directors From: Alice Schroeder, Human Resources Manager Date: December 6, 2016 Re: Personnel Manual and Healthcare Updates

Discussion Pursuant to discussion at Board meetings held over the last couple of months, staff is presenting Personnel Policy updates, including necessary law updates which have been reviewed and approved by our legal counsel, and Healthcare changes for your approval:

Update Healthcare plan as follows: o Out of pocket maximums: $2,000 single/$4,000 family. o Massages/Chiropractor services: 20% co‐insurance for out‐of‐network

providers; cap number of visits per year to 24 for each category. o Substance Abuse/Psychiatric: 20% co‐insurance for out‐of‐network providers. o Prescriptions: Mandatory mail order for “maintenance drugs”. o Emergency Room visits: $100 co‐pay for visits except for major traumas, life‐

threatening injuries or life‐threatening illnesses (in‐ and out‐of‐network). o Update retiree eligibility to minimum age 55 plus years of service must equal 75.

Tier 1: Employees hired prior to 1/1/2017 are eligible to pay 50% of the appropriate premium or accept a stipend based on 55% of the appropriate premium to purchase another plan; both options are available until Medicare age.

Tier 2: Employees hired after 12/31/16 are eligible to pay 100% of the appropriate premium or accept a stipend based on 55% of the appropriate premium to purchase another plan. Both options are available until Medicare age.

Update Personnel Manual as follows: o Boot Allowance: Effective 1/1/2017 adjust the boot allowance by the COLA

percentage with a five year true‐up to start in 2020 (2025, 2030, 2035 etc). o Meals for travel: Use the Federal Per Diem allowance.

Action Request Emerald Staff requests Board approval of these updates.

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