LAKEHAVEN UTILITY DISTRICT
King County, Washington

REGULAR BUSINESS MEETING
September 22, 2005

A regular meeting of the Board of Commissioners of the Lakehaven Utility District, King County, Washington, was held on September 22, 2005 at the Lakehaven Center, 31531 First Avenue South, Federal Way, Washington, 98003.

President Stewart opened the meeting at 6:00 p.m. and asked Commissioner Mayer to lead the flag salute. Members/officials present were as follows:

Ed Stewart - President of the Board
Beverly Tweddle - Vice President of the Board
Don Miller - Secretary of the Board
Dick Mayer - Commissioner
Don Perry - General Manager
Steve Pritchett - General Counsel
Bert Ross - Engineering Manager
Morgan Dennis - Director of Finance/Information System

Upon motion of Commissioner Tweddle, which was duly seconded by Commissioner Mayer, the Board unanimously excused Commissioner Jovanovich from the meeting.

APPROVAL OF MINUTES

Upon motion of Commissioner Tweddle, which was duly seconded by Commissioner Stewart, the Board unanimously approved the minutes of the September 8, 2005 and September 14, 2005 Board meetings as submitted.

APPROVAL OF AGENDA

Upon motion of Commissioner Mayer, which was duly seconded by Commissioner Tweddle, the Board unanimously approved the evening’s agenda as modified below.

1. Executive Session: Add Collective Bargaining to the items being discussion during the Executive Session.

CORRESPONDENCE

Commissioner Mayer referred to a letter each Board member received from Senator Tracy Eide, congratulating the District for recently receiving the “Outstanding Treatment Plant” award for both the Lakota and Redondo Wastewater Treatment Plants.

CONSENT ITEMS

1. Accounts Payable Vouchers and Payroll Transactions Approval: Warrant dates of 9-15-05, 9-21-05, 9-23-05.
2. Employee Leave Donations to Hurricane Relief
3. Non-Represented Employees – Lagging Payroll

Upon motion of Commissioner Miller, which was duly seconded by Commissioner Mayer, the Board unanimously approved the Consent Items as presented.

At this time, it was the consensus of the Board to address Information Item#4, Sewer Survey Results – Phase IV (East North Lake) next as there were citizens in the area who had an interest in this topic

INFORMATION ITEMS

#4, Sewer Survey Results – Phase IV (East North Lake): Mr. Ross stated staff had calculated the results from the survey and distributed them to the Board. Also provided to the Board was a map of the area in question that outlined four distinct systems that would serve all the intended area. He noted that Quadrant has a four-phase development project underway that is adjacent to the area. He went on to state how each of the systems could potentially connect to sewers. Mr. Ross next referred the Board to a draft of a letter staff wanted to send to the property owners in the affected area and stated he was seeking Board approval to send out the letter to meet with the people from the community. A copy of the proposed letter was included with the agenda item. A brief discussion followed as to the history of installing sewers around the lakes within the District. Commissioner Miller indicated he felt Board members would be remiss if they were not interested in keeping the various lakes within the District’s service area clean. There were several people in the audience that live in the affected area and they pointed out some properties on the map that they felt the owners would be interested in connecting to the system. Subsequent to the discussion with the home owners in the audience, it was the consensus of the Board to move forward with this project.

#1, Nepotism Policy: Mr. Pritchett began by reviewing the reason for review of this policy. In response to a grievance, it had been the Board’s decision to review the current policy. He went on to state that with Commissioner Mayer’s help, the policy had been redrafted to include issues such as taking hiring and promoting actions out of the direct loop in such a case. The revised policy not only addresses hiring, it also includes transfers, promotions, etc., all of which calls for a more involved approval process for the Board. A discussion then followed relative to the proposed revisions. It was noted that this policy affects not only someone who is not in the direct chain of command of a family member, but also someone who has the capability to influence these types of actions. During the discussion Mr. Pritchett stated that nepotism goes both ways - favoritism and the opposite of favoritism. Both are forms of nepotism. He added this revision of the policy takes the decision making at staff level and moves it to a higher level and provides the Board the ability to make a decision. It was also noted during the discussion that the word “transfer” implies an employee moving permanently from one job to another, while “training” implies the employee will move to a different job for training purposes. Once the training period is complete, the employee would then move back to his/her original position. Subsequent to the discussion, it was the consensus of the Board to bring this item back to the October 27th Board meeting for consideration.

#2, 16th Avenue Property Sale: Mr. Pritchett stated that the property in question is adjacent to the 16th Avenue Tank Site. There is a person who has expressed an interest in purchasing the property; he owns the parcel south of the property in question and feels he can use this property as well. The offer includes the transfer of an easement over the tank site property as the proposed buyer wants an easement to improve his access. The Board previously declared the property surplus for the purpose of selling it under the requirements of state laws and staff attempted to sell it. Unfortunately no sale was ultimately consummated and the District continues to hold the property. Mr. Pritchett went on to explain the options he felt the Board should consider before considering the request before them. A discussion followed as to the history of the property in question as well as the best way to proceed that would be in the best interests of the District. Subsequent to the discussion, it was the consensus of the Board to direct General Counsel to negotiate with the potential buyer and report back to the Board for their consideration at a future meeting.

#3, Customer Billing Alternatives: Mr. Dennis began the presentation by stressing the fact that the system is currently running adequately with no significant problems. He added that he felt, however, that the District could save some money if the billing functions were either outsourced or if the current billing machine was replaced with a new machine that provides more options than the current machine. He went on to explain the reasons for his position and a discussion followed as to the options that were presented and discussed. During the discussion Mr. Dennis presented a cost comparison of the alternatives for the Board’s consideration. He also explained that should the Board determine that outsourcing would be in the best interests of the District, the current Documatch machine would continue to be used for custom jobs. Mr. Dennis noted staff had been in contact with the firms that specialize in these types of mailings for several years now. Commissioner Stewart expressed his concerns with allowing the bills to be mailed from a different state; it was noted that the District would be realizing a savings if the Board chose this alternative. Mr. Dennis then stated that the District’s contracts for supplies to print the bills in house would expire at the end of the year. The discussion continued and, subsequent to the discussion, it was the consensus of the Board to direct staff to move forward with the outsourcing alternative. Jean Gardiner, the District’s Customer Service Manager, noted that the majority of the agencies in the Continental Users Group, of which she belongs, outsource their bills. She noted some of the agencies use a firm in Edgewood. Mr. Dennis stated this company did not make a proposal to the District when the “Request for Proposals” was advertised; however staff would attempt to find out why they did not respond.

#5, Manhole Adjustments, Asphalt and Concrete Patching – Contract Change Order: Gene Yoder, the District’s Field Operations Manager, began by informing the Board that the information they received in their packets had been updated and went on to provide them with the new information. Mr. Yoder stated that the contractor is required to follow city and county standards when installing manholes and raising them to grade. The City of Federal Way has now determined that the all future manhole “raise-to-grades” should be installed with concrete only. In addition, they are requiring a 24 hour cure time. In order to meet the new requirements, the contractor has submitted a change order to cover the new expense. Since that time, however, City staff has determined that if the compaction test on the asphalt meets county specifications, the use of concrete will not be necessary. Since this information will take a few weeks to develop, it was suggested that this item be tabled until the information is available.

#6, Backflow Prevention Devices: Mr. Yoder presented this item as well. He began by stating that it has always been a policy that the rim elevation of a manhole must be lower than the foundation of nearby houses. He stated standards were changed approximately 12 years ago and they now require a check valve be installed in cases where the finished floor elevation of a house is one foot or lower than the rim of the nearby manhole. While this is done for new construction, older, existing houses are not in compliance with the new regulation. He stated he was proposing sending out a letter to people informing them of the new regulations. The letter provides information relating to a possible backup in the system and the overflow that could occur as a result. In addition, the letter contains directions on what to do to prevent a potential overflow. A discussion followed during which the Board talked about the best way to proceed that would be in the best interests of the District’s ratepayers. Mr. Yoder explained that, if the Board approves this item, it would be implemented with the line cleaning program. The crews would hand out letters when these problems are discovered during the course of main cleaning. He added that check valves did not exist when the plumbing for the houses was installed. A suggestion was made to make sure that this is a requirement of the plumbing code. The procedure that would be followed by staff was outlined during the discussion. The Board then discussed the best way to proceed. Some recommended changes to the letter were suggested and, subsequent to the discussion, it was the consensus of the Board to move forward with this project as recommended by staff.

COMMITTEE REPORTS/COMMISSIONER COMMENTS

Commissioner Stewart shared information he had learned from a recent television program regarding the history of water and water quality. He stated he found the program to be very informative and interesting. He added the program also told about the history of the development of plumbing fixtures as well.

Commissioner Miller reported he had recently attended a Public Risk meeting. He shared information he learned from a presentation provided by two attorneys that he felt were very interesting.

STAFF REPORTS

GENERAL COUNSEL: Mr. Pritchett reported that, the equipment used to print the customer bills is located in the room that also includes the computer system’s servers, which is upstairs in the Administration Building. He noted that Mr. Dennis felt the servers would be better located elsewhere for security reasons and the vault in the basement of the building was suggested to be a better location. In addition, the floor in the current computer room will not continue to take all the weight of the equipment in that room. He added if the Board determines to keep the current bill printing equipment, that machine could be relocated to the current mail room. He went on to state that staff was contemplating moving the conference room into the server room and make the conference room the break room. Mr. Pritchett went on to report on the City/District Liaison meeting that was held the prior Monday. He added that Commissioners Jovanovich and Tweddle had also attended and the discussion covered a number of things, one of them being the use of French Lake Park as an “Off-Leash” dog park. Commissioner Tweddle indicated that City staff feels the park is being better maintained by the people who are using it. The Board indicated its view that the use of the property as a dog park is beneficial to the community.

DIRECTOR OF FINANCE AND INFORMATION SYSTEMS: Mr. Dennis reported that the State Auditors were currently in the process of auditing of the 2004 financial statements.

ENGINEERING MANAGER: Mr. Ross reported that information regarding a potential pressure sewer system that would serve the west side of Five Mile Lake was included in his staff report. He referred to the informational letter, also included in his report, which related to a survey that was conducted in 2003 and did not include cost estimate information. Subsequent to the discussion of the letter, it was the consensus of the Board to have the letter mailed to the affected property owners. Mr. Ross next provided the Board with some information which was a follow-up to Mr. Hill’s presentation regarding Development Services the prior week. He indicated that Mr. Perry has spoken to staff at the City of Federal Way regarding some actions Lakehaven staff could take on similar occasions with troublesome developers and their consultants. Mr. Perry stated that, as the Board was aware, the District does not recover all of staff’s costs in this area. He suggested the establishment of a predevelopment review process to help recoup some of the revenue loss. He added that the goal would be to return District staff to City’s Development Review process that has been abandoned due to work load. He then suggested applying a surcharge to the customer any time three or more comments remained unanswered after two plan reviews had occurred. Any plan review that takes place after the second review would be billed at the overtime rate. Other suggestions were discussed as well as the reasons for them. Lastly, a suggestion for completeness of the plan review by the City, the Fire Department and Lakehaven was presented. Mr. Perry explained the proposed process in detail and indicated staff would be looking for input from the Board regarding this proposal. He indicated that under the proposed plan not just one agency would have the final sign off; instead it would be a coordinated effort. Commissioner Stewart inquired as to which agency would hold the final drawing and Mr. Ross noted District staff would have a complete set of water and sewer facilities. He then noted that with Auto cad, it would be much easier to make changes and all agencies would be provided the same documents instantly. At the conclusion of the report, Mr. Perry stated he would be providing the Board with a more complete product at a later date. Mr. Ross stated there may be some implications on fees and charges. Mr. Ross then distributed copies of two documents from Mr. Hill’s recent presentation that contained both challenges and options for Development Services.

GENERAL MANAGER: Mr. Perry stated he had recently met with staff from the City of Edgewood. During this meeting, questions were asked about the District’s connection charges, rates, etc. Mr. Perry next reported that the Notice to Proceed was given to the contractor for the Lakota Beach sewer project the prior week. He then stated that Rich Fujimoto, Senior Operator at the Lakota Wastewater Treatment Plant, continues to be on-call to travel to Louisiana and Mississippi to provide hurricane relief through a group that works with the Red Cross. Mr. Fujimoto had inquired if the Board would support him going, if called. A discussion followed regarding details of this issue and Mr. Perry indicated he would contact the Board President should Mr. Fujimoto be asked to go, since the decision would be the responsibility of management.

EXECUTIVE SESSION

At approximately 8:30 p.m., the regular meeting was recessed for an Executive Session to discuss two potential litigation items and one collective bargaining item. It was stated that the Executive Session would last approximately 30 minutes. At approximately 9:00 p.m., it was announced that the Executive Session would continue for approximately 30 additional minutes. At approximately 9:17 p.m., the Executive Session was adjourned and the regular meeting was reconvened.

ADJOURNMENT

There being no further business to come before the Board, the meeting was adjourned at approximately 9:18 p.m.