MINUTES OF SPECIAL MEETING

OF THE BOARD OF COMMISSIONERS OF

COAL CREEK UTILITY DISTRICT

OF KING COUNTY, WASHINGTON

Held February 24, 2006

A special meeting of the Board of Commissioners of Coal Creek Utility District was held at the Wild Iris Inn, 121 Maple Avenue, La Conner, Washington, on February 24, 2006. The meeting was called to order by Commissioner Martin at 9:00 a.m. Commissioners Anderson and Kunkel were present. District management staff members Tom Peadon, Larry Jones and Pam Nelson were also present.

BOARD RETREAT (CONTINUED)

The purpose of the meeting was to continue the discussion of the agenda for the Board retreat.

DISTRICT CAPITAL FACILITIES PLANS

A. Public Works Projects. Staff provided the commissioners with copies of a list identifying recently completed, under design, under construction and District capital projects planned for construction through the year 2009. The commissioners requested certain modifications to the proposed plan and staff will re-present the plan to the Board at a future meeting for further discussion and approval.

The commissioners and staff then discussed the Lower May Creek sewer project and considered an engineering report dated February 13, 2006 from PACE identifying seven services alignments/options. Following consideration of each option, the Board tentatively identified option No. 7 as the most cost-effective and least intrusive route for the sewer line. Following discussion, the Board directed staff to schedule the topic for further discussion at a future Board meeting. Staff and the commissioners also identified planning for the Coal Creek widening phase II and III projects and a District GIS system as other high priority projects. Staff will present further information to the Board at a future meeting regarding those projects as soon as possible.

B. Vehicle, Equipment and Surplus Plans. Staff presented the existing vehicle purchase schedule which indicated the next purchase of a District vehicle in the year 2011. However, the commissioners directed staff to provide information at a future Board meeting regarding the possible purchase of a vehicle for staff and commissioner usage for District travel and other business.

Staff presented a list of recommended equipment purchases with a proposed budget. Equipment included a sewer camera, an easement roller, blower attachment and IT equipment. The Board favorably considered the list which will be considered at a future Board meeting for approval.

Staff reminded the commissioners that the Board had previously authorized the purchase of a vehicle for meter reading but staff had not yet been able to locate a suitable vehicle. Therefore, the previously authorized purchase of that vehicle would remain on the existing vehicle purchase list.

Staff presented the commissioners with a list of personal property which were surplus the District’s needs. Some of the property had value and could be surplussed through the procedures set forth in the statutes. Otherwise, some of the property had no value and should be disposed of and removed from the District chart of fixed assets. Following discussion, the Board tentatively approved the surplusing of the property and disposal of the property as proposed by staff with no value. Staff will present resolutions to the Board for those actions at a future Board meeting.

CITY OF NEWCASTLE RELATIONSHIP

A. Services to Newcastle. Staff provided the commissioners with copies of the signed interlocal agreement with the City of Newcastle for street maintenance services for their information. Staff then reported on the implementation of the agreement during the winter of 2005 - 2006.

B. Future Joint Meetings/Council Meetings. The commissioners and staff discussed the District’s relationship with the City of Newcastle. The commissioners felt the District should continue to have a positive relationship with the City and that a commissioner and staff person should attend all City Council meetings to report on District activities and to be available to provide information regarding the District if appropriate. The District should also propose another joint meeting with the City Council when appropriate.

PERSONNEL

A. Management Discussion/Contracts. The commissioners and staff discussed management contracts for senior management staff. The manager, assistant manager and office manager have had employment contracts with the District since 1996. The discussion addressed the appropriate length of the contracts and an annual evaluation process. Following discussion, the Board determined to continue with two year contracts for the assistant manager and office manager and directed staff to provide a draft evaluation form at a future meeting for annual performance evaluations. Otherwise, the Board will review the employment contract for those positions each year in November to determine their appropriate length and terms.

Regarding the general manager, Peadon advised that due to his length of service he was now eligible to retire but was interested in working on a part-time basis. The Board discussed his unique qualifications and experience with the District and its utility systems. Following discussion, the Board authorized Peadon to obtain information regarding rules and regulations established by the State Retirement System and to report back to the Board regarding a part-time proposal.

B. Union Contract. Staff provided the commissioners with copies of the recently approved union contract which was effective January 1, 2006 and will expire on December 31, 2008. The commissioners and staff then discussed the salary structure and schedules contained in the contract.

C. Employee Handbook. Changes to the Employee Handbook to be more consistent with the union contract as well as changes to comply with state law were discussed. Further, a discussion of supplementing military pay in the event of military duty was also discussed. Staff will present a revised Employee Handbook at a further Board meeting and will report regarding the legality of off-setting military pay.

COMMISSIONERS DISCUSSION/RETREAT EVALUATION

The commissioners then discussed and evaluated the retreat and provided the staff with input regarding topics and procedures for a future retreat. For example, the commissioners felt the Board and Staff should have a one-day mini-retreat to be held in the Fall of 2006 and each year thereafter and that proposal will be further considered. The commissioners also felt there should be a commissioner clothing policy and that will be further discussed. Further, they also felt that retreat information should be provided to the commissioners prior to the retreat for their consideration. They also requested that an action item list from the retreat be prepared for future consideration and implementation. Lastly, in summary, the commissioners felt the retreat had been very informative, productive and had provided excellent discussion of District business.

OTHER DISTRICT BUSINESS

As there was no further business or persons to be heard, the meeting was adjourned at 6:30 p.m.

Richard D. Anderson, Commissioner

Douglas C. Kunkel, Commissioner

Pamela A. Martin, Commissioner