MINUTES OF REGULAR MEETING

OF THE BOARD OF COMMISSIONERS OF

COAL CREEK UTILITY DISTRICT

OF KING COUNTY, WASHINGTON

Held July 26, 2006

A regular meeting of the Board of Commissioners of Coal Creek Utility District was held at the District office, 6801 132nd Place SE, Newcastle, Washington, on July 26, 2006. The meeting was called to order by Commissioner Martin at 5:00 p.m. Commissioners Anderson and Kunkel were present. District Staff, Larry Jones and Pam Nelson were also present. David Hutley, District Engineer, and John Milne, general counsel, were also present.

CONSENT AGENDA

Approval of Minutes - Regular Board meeting of July 12, 2006.

Anderson made a motion to approve the consent agenda. Kunkel seconded the motion which was carried unanimously.

CITIZENS' COMMENTS AND CONCERNS

There were no comments from the citizens in attendance.

GROWTH MANAGEMENT PLANNING COUNCIL

Jones provided the Commissioners with a letter dated June 29, 2006 from the General Manager of Cedar River and Water District inviting the District to financially participate in representation on the Growth Management Planning Council and for staff assistance to the King County Regional Water Quality Committee. Following discussion, as the Commissioners felt that it was important that special purpose districts have a voice and a vote in those activities, Martin made the motion to authorize funding in the amount of $1,500 for those activities. Kunkel seconded the motion which was carried unanimously.

PUBLIC RELATIONS - RFP

Jones provided the Commissioners with copies of the proposals received from the two public relations/communication consultants that the District had contacted. Jones briefly addressed the substance of the two proposals. District Staff and the Commissioners may also review the consultants websites for additional information. Following discussion, the Board determined to schedule interviews of the two consultants at a special meeting to be held at the District office commencing at 5:00 p.m. on Wednesday, August 2, 2006 if the consultants were available for interviews that day or to schedule interviews when all of the commissioners and consultants were available. Staff was directed to schedule interviews of approximately 45 minutes for each consultant. The Board requested that the engineer and attorney also attend the consultant interviews.

LOWER MAY CREEK/WINDTREE SEWER PROJECT

Jones and Hutley reported on the status of the sewer project. Hutley presented a report dated July 25, 2006 addressing an option to provide sewer service by a second lift station rather than by gravity sewer along the old railway right-of-way. The option would result in the elimination of approximately 1,400 lineal feet of sewer line from the project and would reduce the project's cost by more than $100,000. Following discussion, the Board authorized and directed Staff and Engineer to proceed with the new design option to include the second lift station and to schedule a site visit with the Commissioners at a convenient time.

TRANSITIONAL PLANNING

The Commissioners and Staff discussed transition planning in light of the retirement of the District's General Manager effective July 31, 2006. The Board requested input from management staff regarding the transition. Jones advised that he had been primarily responsible to manage and operate the District in the absence of the General Manager due to vacations or otherwise and felt that he could serve as the interim or acting manager pending the Board's determination regarding a replacement for that position. He also addressed the temporary reassignment of certain job duties in the absence of a permanent General Manager but assured the Board that existing managing staff would continue to work as a team.

Nelson spoke in favor of Jones' proposals and assured the Board that management staff would continue to function as a team. She also advised that the retiring General Manager had recommended that the Board designate only one management staff to serve as the interim District manager for chain-of-command purposes.

The Commissioners then expressed support for designating one management staff to serve as the District's Interim Manager pending the Board's determination regarding permanent staffing. To that end, Martin requested that staff include the topic of "transitional planning" on all future regular Board meeting agendas.

Following discussion, Anderson made the motion to appoint Jones as the District's Interim General Manager effective upon the retirement of the current General Manager. Kunkel seconded the motion which was carried unanimously. Among other things, the Commissioners encouraged Jones to continue to develop a stronger relationship with the City of Newcastle at both the Staff and City Council levels.

Jones thanked the Commissioners for their demonstration of confidence in him by appointing him Interim General Manager and emphasized that the District's management and operation would be his number one priority.

ATTORNEY'S COMMENTS

Milne provided the Commissioners with copies of a draft agreement for consulting services to obtain on-call financial consulting services. Following discussion, the Board authorized Milne and Staff to provide the draft to FCSG, to negotiate a fee proposal and to report back to the Board.

OFFICE MANAGER'S COMMENTS

Nelson reported that the District had obtained a corner booth for the Newcastle Days Festival and would now commence preparation for participation in that festival to be held in September, 2006.

Nelson advised that the registration materials for the Fall State Association Conference were now available. Kunkel advised that he could not attend the Conference. Martin advised that she planned to attend the Conference. Anderson was uncertain at this time. Following discussion, the Board authorized the attendance of both the Office Manager and Interim Manager at the Conference.

Nelson provided the Commissioners with information regarding a discounted membership at a local health facility for District employees. Following discussion, the Board authorized the sponsorship of the discounted group plan for District employees to join the health club if they so desired. If so, the discounted initiation fee and monthly dues would be deducted from the employee's compensation.

Nelson provided the Commissioners with a revised Employee Manual applicable to all non-union District employees. The Commissioners then provided Nelson with several corrections and modifications to the manual. Following discussion, Kunkel made the motion to approve the Employee Manual for all non-union District employees as modified to be effective immediately by the adoption of Resolution No. 1687. Anderson seconded the motion which was carried unanimously. Staff will provide the commissioners with copies of the revised manual at the next regular meeting, provide copies of the manual to all District employees covered by the manual and have those employees sign an "acknowledgement of receipt" for the manual for the District's files.

Nelson reminded the Commissioners of the Open House to be held at the District office on Monday, July 31, 2006 to honor the District's General Manager due to his retirement that day.

INTERIM MANAGER'S COMMENTS

Jones presented an updated District action items report for the Commissioners information.

COMMISSIONER'S COMMENTS

Kunkel commended Staff on the employee recognition dinner which had been held on July 22, 2006 to recognize the retirement of Tom Peadon as the District's General Manager.

Anderson requested a status report on the Renton intertie. Jones and Hutley reported on the status of that matter.

Anderson requested a status report on the Olympus Lift Station odor control equipment. The Staff advised regarding the hours the equipment was utilized and advised that the District had not received any complaints regarding order control since the equipment started operating.

Martin advised that she was now available to attend more night meetings as necessary and appropriate such as the State Association Section IV meeting, Newcastle City Council meetings, and MWPAAC. The Commissioners also discussed hosting a Section IV meeting at the District and authorized Jones to advise the Section IV Chair to that affect.

APPROVAL OF VOUCHERS

The Board approved for payment Water/Sewer Maintenance Fund Voucher Nos. 36766 through 36793 in the amount of $43,907.99.

OTHER DISTRICT BUSINESS

As there was no further business or persons to be heard, the meeting was adjourned at 8:10 p.m.

Richard D. Anderson, Commissioner

Douglas C. Kunkel, Commissioner

Pamela A. Martin, Commissioner