METROPOLITAN UTILITIES DISTRICT Committee Meetings Board Documents 3 … · considered standard practice in the industry as a way to ... piping which was found to be severely

METROPOLITAN UTILITIES DISTRICT

Committee Meetings

8:15 a.m. March 5, 2014

AGENDA

1. Roll Call 2. Open Meetings Act Notice

Construction and Operations – Frost, Friend, Lindsay

1. Capital Expenditures for Approval –Tab 6 2. Bids on Materials and Contracts – Tab 7 3. Gas Infrastructure Replacement – Tab 19 4. Gas Supply Update

Services and Extensions – Friend, Frost, Dowd

1. Water Main Extensions – Tab 10

Judiciary and Legislative - Dowd, Cavanaugh, Begley

1. 2014 Third Legislative Report – Tab 13

2. Settlement of Claim – Nicole Walter – Tab 14

Committee of the Whole 1. Selection of New President


Regular Meeting

9:00 a.m. March 5, 2014

AGENDA

1.

Roll Call

2. Open Meetings Act Notice 3. Pledge of Allegiance 4. Approval of Minutes – Committee and Regular Board Meetings,

February 5, 2014 5.

President’s Report

CONSTRUCTION & OPERATIONS

6. 7. 8. 9.

Capital Expenditures for Approval Bids on Materials and Contracts Report on Purchases Between $25,000 and $50,000 Acceptance of Contract and Payment of Final Estimates

SERVICES & EXTENSIONS

10. Water Main Extensions

PERSONNEL 11.

12.

Promotional Increases SPA Ratification

JUDICIARY & LEGISLATIVE

13. 14.

2014 Third Legislative Report Settlement of Claim – Nicole Walter

SECURITY &

SAFETY 15. Information Security Update (CLOSED SESSION)

BOARD 16.

17. 18.

Aureus Group Contract Obligations/Performance (Closed Session – Potential Litigation) Selection of New President Other Matters of District Business for Discussion


Minutes of Committee Meetings

February 5, 2014

Roll Call Chairperson Lindsay called the Committee Meetings to order at 8:15 a.m. On a

roll call vote, the following members were present:

Amy Lindsay Tim Cavanaugh

Jim Begley Tom Dowd Dave Friend Jack Frost

Steve Patterson Mark Doyle, Interim Secretary

Also present were various members of the staff, as well as representatives from I BEW #1521, and other members of the public.

Open Meetings Act Notice Chairperson Lindsay advised those in attendance that a copy of the Open

Meetings Act was posted in the rear of the Board Room.

Construction and Operations - Frost, Friend, Lindsay At 8:16a.m., Mr. Keep reviewed the capital expenditures as outlined in his letter

to the Committee dated January 22, 2014. He first highlighted the upgrade of the LNG Plant pretreatment skid and the replacement of the regeneration heater. He pointed out to Board Members that they had approved $770,000 in July of 2013 for the design phase of this project and the original plan was to phase the construction over three to four years. That plan is no longer feasible because multiple pieces of equipment scheduled for replacement in 2015 were found to be incompatible with the increased operating temperatures of the new regeneration heater. The heater was inspected in 2012 and it was recommended at that time that replacement would be warranted within two years due to thinning and deterioration of the heat transfer coil fins and sidewall. This capital expenditure will cover replacement of the regeneration heater as well as the replacement of the valves and heat exchangers which were not rated for the higher temperatures.

Mr. Keep next discussed the clear well sealant repairs at the Platte South Water Plant. The job was initially intended to require a simple caulk replacement in order to prevent water from escaping from the well into the ground, thereby mixing finished potable water with ground water. Upon closer inspection, the caulk was found to be asbestos-based and therefore subject to a more involved and expensive asbestos

Committee Meetings & Regular Board Meeting February 5, 2014

Page 1 of 11

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Approved

abatement process. Mr. Keep noted that since this unforeseen issue has driven the project $180,000 over budget, the possible postponement of another project to add three gas engines at the Platte South well field may be considered, depending upon what happens this summer.

Mr. Keep then reviewed three "annual authorizations," the first of which pertained to the continuation of the cross bore inspections of sewer laterals, i.e., the pipe connection between a building and the sewer main that runs under the street. The currently budgeted amount is $1,100,000 for 4,100 inspections to be conducted for the next year beginning March 1, 2014 to February 25, 2015. Cross bore inspections are considered standard practice in the industry as a way to locate damaged sewer laterals which have been inadvertently penetrated or damaged during pipe installation using trenchless technology. The District contracts with two local professional plumbing companies to conduct the inspections for all current projects going forward , and also conduct inspections of past projects since the time trenchless technology began. The danger posed by cross bores lies in the potential release of natural gas into the sewer pipe and therefore, into a building. Despite the risk of cross bores, trenchless technology continues to be a much less expensive option and permits minimal excavation and disruption.

Another of the annual authorizations is for $13,471,727 in capital expenditures to cover all anticipated new and replacement gas services as well as service abandonment expenses for the calendar year. In addition, $1 ,700,000 in capital expenditures will pay for all the District's gas meters, ERT's, and regulators.

At 8:20 a.m., Mr. Keep reviewed the Change Order No. 1 for the remodeling of the first and second floor restrooms at the Operations Center, as outlined in his letter to the Committee dated January 15, 2014. Mr. Keep reviewed a number of the details of the remodeling project including the removal and replacement of the existing floor drain piping which was found to be severely corroded and leaking; the relocation of an existing Variable Air Volume box and the installation of two ceiling access doors; the cost of additional building permits for the project; occupancy sensors for the lighting in each of the restrooms on the first floor, the locker and shower rooms; and other additional plumbing and framing costs.

At 8:21 a.m., Ms. Schneider reviewed the bids outlined in the letter from Jon Zellars dated January 28, 2014.

At 8:25 a.m., Mr. Doyle reviewed the progress made regarding the new CNG station proposal, as outlined in his letter to the Committee dated January 30, 2014. He reported that the District recently won unanimous approval from the Sarpy County Board on its zoning request which allows the District to move forward with the project. He outlined the three major components of the project: a contract with Trillium CNG to design, build , own and operate the station; a Memorandum of Understanding with Werner Enterprises which guarantees at least ten Class 8, or heavy duty trucks will be regularly fueling at the station; and a land purchase agreement with Omaha Truck


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Center, a local dealership and service center for large CNG trucks, whereby the Truck Center has purchased a five-acre plot on which to build a new natural gas-compliant sales and service facility, and will sell half the plot to the District for the purpose of building the new CNG station. Mr. Doyle presented power point slides to demonstrate the proposed plans for the site. The presentation included a nationwide map of existing as well as proposed Trillium CNG stations to better illustrate the strategic significance of a centrally located station; the type of large CNG tractor trucks that will be using the facility; and a list of a number of local business fleets currently engaged in utilizing CNG as a transportation fuel.

Mr. Doyle noted that several external factors could have derailed the project due to a lack of understanding of what CNG is and what it is not. Opposition from a neighboring business, for example, was allayed once more information was provided. Mr. Doyle noted that the obstacles encountered would not have occurred had the commodity in question been diesel or unleaded gas. He pointed out the positive takeaway is that this type of conversation and education is taking place all around the country while the industry continues to grow and evolve.

Ms. Schneider prepared and shared an analysis and 1 0-year outlook of the District's risk assessment. She told the Committee that back in November of 2013, the projected cost of the project was estimated to be approximately $2.9 million. Now the project will entail some site development but because a buyer is involved now, the current cost for the District has dropped to $545,000. She told the Committee that the basic assumptions and estimates in the analysis were conservative based solely upon income generated from the Werner fleet and not from other commercial use. The estimates also did not factor in the possibility of future federal tax credit incentives for production of CNG. Mr. Patterson took issue with the timing of the analysis in that he was unable to make an informed decision on this matter without having had enough time to prepare. Mr. Friend suggested that the District puts in meters and miles of pipe in the ground with the expectation of further land development which does not always materialize. Mr. Patterson reiterated that his concern was not a risk assessment issue but rather a need for timely information as a matter of due diligence as a Board Member.

Services and Extensions - Friend, Frost, Dowd At 8:46a.m., Mr. Keep reviewed this month's two primary water main projects, as

outlined in his letter to the Committee dated January 23, 2014. The first project involved several mains for a commercial development at 151 51 and Schram Road to provide domestic water service and fire protection. The other main installation for Northridge housing subdivision at 1851

h and Mason Streets will also provide domestic water service and fire protection.

Personnel - Friend. Patterson, Begley At 8:48 a.m., Mr. Tripp reviewed the proposal to hire a firm to handle workers'

compensation claims as part of a modification of the workers' compensation process for the District. The position of Occupational Nurse was eliminated at the end of calendar


Page 3 of 11

year 2013, and primary responsibility was assumed by Human Resources. The objective of the modification is to develop a process that is efficient, dependable and consistent while controlling administrative costs. Of the six proposals that were reviewed, Helmsman Management Services was selected to assume the responsibil ity as third party administrator to handle medical and wage/indemnity claims. Mr. Tripp told the Committee that the District will be much more proactive in handling the cases as they occur, and will also have on hand a 24/7 "one-call" system to ensure timeliness, accuracy and prompt communication with the employees from the outset. Mr. Tripp also explained the anticipated costs under the proposed contract provisions. Mr. Jeff Barrett, the District's consultant from SilverStone Group who was retained to assist in the selection process, was available to answer questions from Board Members about the proposed contractual relationship. Mr. Friend suggested that it appeared the onus was also on the employee more so under this system to notify the District of an injury incident in a timely manner. Mr. Patterson requested an actual dollar estimate of the annual cost for "as needed services" which was mentioned in Mr. Tripp's letter. Mr. Barrett estimated that based upon the historical data of approximately fifty claims per year, over a five-year period, it would cost roughly $5000 to $7000 annually. He also remarked that the hybrid system they use involves a nurse triage program to help "walk" the employee through the process.

At 8:53 a.m., Mr. Tripp reviewed the Bargaining Unit Wage Reopener as outlined in his letter dated January 29, 2014. As part of the District's Bargaining Agreement, the Reopener allows an employee occupying a position covered by the Agreement to petition a committee comprised of two union and two management representatives, in order to adjust the pay of their position if their duties and responsibilities have changed significantly since the job description was last created or last updated. Of the 22 employees' petitions received, three positions were recommended for wage adjustments.

Mr. Friend initiated a discussion about the reorganization of the Security and Safety Department positions, and expressed support for their underlying rationale.

Judiciary and Legislative- Dowd. Cavanaugh, Begley At 9:18a.m., Mr. Kubat reviewed the status and positions on legislative bills as

outlined in his letter to the Committee dated January 31, 2014.

Mr. Kubat reviewed each bill separately, including LB 823 introduced by Senator Lautenbaugh to privatize the District; LB 1014 which would establish district elections for MUD Board Members; LB 150, a bill introduced by Senator Nordquist to eliminate the 2% statutory municipal fee for compressed natural gas when used as a vehicular fuel ; LB 760 introduced by Senator Mello which creates funding assistance mainly for the City of Omaha's CSO project; LB 890 introduced by Senator Dubas which would create a 45-day waiting period prior to any real estate acquisition that involves private property for public use; LB 1098 introduced by Senator Carlson which would change the membership, powers and duties of the Natural Resources Commission; LB 122 introduced by Senator Lautenbaugh to expend $2 million for an environmental study for

Committee Meetings & Regula r Board Meeting February 5, 2014

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a proposed hydroelectric dam near Ashland, Nebraska; and LB 284 introduced by Senator Conrad which would raise the maximum allowable damages from $1 million to $3 million, under the Political Subdivisions Tort Claims Act.

Committee of the Whole- Beg/ev, Cavanaugh, Dowd, Friend, Frost Lindsay, Patterson

At 9:40 a.m., Chairperson Lindsay provided an update regarding the search process for selection of a new president since the last Board Meeting. She suggested the possibility of scheduling a Special Board Meeting the last week of February and asked Board Members to check their schedules during the break. Chairperson Lindsay then announced the Committee Meetings would adjourn and Regular Board Meeting would convene at 9:45a.m.

At 9:40a.m., Committee Meetings adjourned.

MED/mjm Interim President


Page 5 of 11


Minutes of Regular Board Meeting

February 5, 2014

The Board of Directors of the Metropolitan Utilities District of Omaha met in the Board Room of the Headquarters Building at 1723 Harney Street in regular session at 9:17a.m. on February 5, 2014.

Advance notice of the meeting was posted on the first floor of the Headquarters Building from January 8, 2014 to February 5, 2014. Notice of the meeting was published in the Omaha World-Herald on Sunday, January 26, 2014. The agenda of the meeting was available for public inspection at the office of the Secretary and President and copies were delivered to Board Members on January 21 , 2013.

AGENDA N0.1 ROLL CALL

Chairperson Lindsay called the meeting to order at 9:47a.m. On a roll call vote the following members were present:

Amy Lindsay Tim Cavanaugh

Jim Begley Tom Dowd

Dave Friend Jack Frost

Steve Patterson Mark Doyle, Interim Secretary

Also present were various members of the staff, representatives of Local Union I SEW #1521 , and members of the public.

AGENDA NO.2 OPEN MEETINGS ACT NOTICE

Chairperson Lindsay advised those in attendance that a copy of the Open Meetings Act was posted in the rear of the Board Room.

AGENDA NO.3 PLEDGE OF ALLEGIANCE

Chairperson Lindsay invited those who cared to participate, to stand and recite the Pledge of Allegiance.


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AGENDA NO.4 APPROVAL OF MINUTES FOR COMMITTEE MEETINGS AND REGULAR BOARD MEETING -JANUARY 8, 2014

At 9:48 a.m., Mr. Frost moved for approval of the Minutes of the Committee Meetings and Regular Board Meeting for January 8, 2014, which was seconded by Mr. Friend and carried on a roll call vote.

Voting Yes: Lindsay, Cavanaugh, Begley, Dowd, Friend, Frost, Patterson Voting No: None

AGENDA NO.5 PRESIDENTS REPORT

MINUTES FILE DOCUMENT NO. 137156

At 9:48 a.m., Mr. Doyle informed Board Members that the statistical report for the District for the month of January was included in their Board Books and that information would not need reiteration. He reported that the District's Gas Distribution Division recently reached an impressive milestone by successfully completing 15 years (or the equivalent of 452,000 labor hours) without a chargeable lost time accident. He noted these employees are responsible for ensuring the safe and reliable operation of the natural gas distribution system, and often perform high risk work such as gas leak repair.

AGENDA NO.6 CAPITAL EXPENDITURES FOR APPROVAL

At 9:50 a.m., Mr. Frost moved for approval of the proposed capital expenditures as outlined in Mr. Keep's letter dated January 22, 2014 which was seconded by Mr. Friend and carried on a roll call vote.



AGENDA NO.7 CHANGE ORDER NO. 1 - REMODEL 1st and 2"d FLOOR RESTROOMS AT OPERATIONS CENTER

At 9:51 a.m., Mr. Frost moved for approval of the proposed change order regarding the remodeling of the restrooms at the Operations Center as outlined in Mr. Reisner's letter dated January 15, 2014, which was seconded by Mr. Friend and carried on a roll call vote.




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AGENDA NO.8 BIDS ON MATERIALS AND CONTRACTS

At 9:50a.m., Mr. Frost moved for approval of the bids for materials and contracts as described in Mr. Zellars' letter to the Committee dated January 28, 2014, which was seconded by Mr. Friend and carried on a roll call vote.



AGENDA NO.9 REPORT ON PURCHASES BETWEEN $25,000 AND $50,000

At 9:50 a.m., Mr. Frost requested that the report on purchases between $25,000 and $50,000, as presented in Mr. Zellars' letter to the Committee dated January 28, 2014, be placed on file.


AGENDA NO. 10 ACCEPTANCE OF CONTRACT AND PAYMENT OF FINAL ESTIMATES

At 9:51 a.m., Mr. Frost moved for approval of the Acceptance of Contract and Payment of Final Estimates as outlined in Mr. Keep's letter dated January 27, 2014, which was seconded by Mr. Friend and carried on a roll call vote.



AGENDA NO. 11 CNG STATION - 132"d AND CORNHUSKER ROAD

At 9:51 a.m., Mr. Frost moved to approve Management's recommendation to move forward with the CNG station as outlined in Mr. Doyle's letter dated January 30, 2014, which was seconded by Mr. Friend and carried on a roll call vote. Mr. Cavanaugh lauded Management's decision to move forward with the project and recognized them for their hard work. Mr. Patterson stated he regretted being unable to support the measure but felt he was provided insufficient time to review the financial information that was presented in support of the project proposal. Mr. Friend stated his belief that the estimates are very conservative and that the project will pay off.

Voting Yes: Lindsay, Cavanaugh, Begley, Dowd, Friend, Frost Voting No: Patterson



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AGENDA NO. 12 WATER MAIN EXTENSIONS

At 9:53a.m., Mr. Friend moved to approve the water main extensions as outlined in Mr. Keep's letter dated January 23, 2014, which was seconded by Mr. Cavanaugh and carried on a roll call vote.


AGENDA NO. 13 PROMOTIONAL INCREASES


At 9:54 a.m., Mr. Friend moved to approve the promotions as outlined in Mr. Tripp's revised letter dated January 30, 2014, with the exception of one Human Resources position listed on page 3. The motion was seconded by Ms. Lindsay and carried on a roll call vote.



AGENDA NO. 14 WORKERS' COMPENSATION

At 9:57 a.m., Mr. Friend moved to approve Management's recommendation and authorize the President to enter into a contract with Helmsman Management Services as outlined in the letter by Mr. Tripp to the Committee dated January 30, 2014. The motion was seconded by Mr. Cavanaugh and carried on a roll call vote.



AGENDA NO. 15 BARGAINING UNIT WAGE REOPENER

At 9:58 a.m. , Mr. Friend moved to approve the Management's recommendations as outlined in Mr. Tripp's letter dated January 29, 2014, which was seconded by Mr. Begley and carried on a roll call vote.




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AGENDA NO. 16 2014 LEGISLATIVE REPORT

At 9:58 a.m., Mr. Dowd moved to approve Management's recommendations as outlined in Mr. Kubat's letter dated January 31, 2014 with the exception of LB 1014 and LB 760 which would be voted on separately. The motion was seconded by Mr. Friend and carried on a roll call vote.



At 10:00 a.m., Mr. Cavanaugh moved to support Management's recommendations with regard to LB 760, which was seconded by Mr. Friend and carried on a roll call vote.

Voting Yes: Lindsay, Cavanaugh, Begley, Dowd, Friend, Frost Voting No: Patterson


At 10:00 a.m., Mr. Friend moved to support Management's recommendations with regard to LB 1014, which was seconded by Mr. Begley and carried on a roll call vote. Mr. Cavanaugh renewed his opposition to the legislative proposal. The motion carried on a roll call vote.

Voting Yes: Lindsay, Begley, Dowd, Friend, Frost Voting No: Cavanaugh, Patterson


AGENDA NO. 17 SELECTION OF NEW PRESIDENT

At 10:02 a.m., Ms. Lindsay recommended holding a Special Board Meeting the last week of the month, on February 26, 2014 at 8:15 a.m. to interview finalists for the President's position. There was no disagreement.

AGENDA NO. 18 OTHER MATTERS OF DISTRICT BUSINESS FOR DISCUSSION

At 10:04 a.m., Ms. Lindsay asked if any members of the public had any comments or issues to present to the Board.

Mr. John Hemschemeyer presented his observations and opinions regarding the Safety and Security reorganization recommendations.


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At 10:05 a.m., Mr. Frost moved to adjourn the regular Board Meeting, which was seconded by Mr. Friend and carried on a roll call vote.


The meeting was adjourned.

MED/mjm



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METROPOLITAN UTILITIES DISTRICT Inter-Department Communication

February 18, 2014

Subject: CAPITAL EXPENDITURES FOR APPROVAL

To: Committee on Construction and Operations cc: all Board Members, Bucher, Doyle, Schneider and all Vice Presidents

From: Scott L. Keep, Senior Vice President, Operations

The following items will be on the March 5, 2014 Committee Agenda for consideration and the March 5, 2014 Board Agenda for approval:

INFRASTRUCTURE REPLACEMENT/RELOCATIONS

1. 100051000991, 100065001423 and 100095001134- $60,000- RATIFICATIONAbandoned 300 feet of 6-inch and 160 feet of 12-inch water main, installed 160 feet of 12-inch water main and reconnected water services to the new main in Childs Road, Bellevue Boulevard to Grandview Avenue. The existing 6-inch main, installed in 1950, broke in two places in January causing significant paving and subgrade damage. The damage compromised the existing 12-inch water main forcing its replacement. Five customers were without water service for over 48 hours while crews replaced 160 feet of the 12-inch water main and reconnected the water services. A subsequent project is being designed for abandonment of the remaining 6-inch water main between Fort Crook Road and Bellevue Boulevard. Customers served by the 6-inch main will be reconnected to the parallel 12-inch main (this request is for the pipe work only).

2. 100053001268 and associated job numbers - $2,000,000 -Abandon 2,150 feet of 36-inch, 600 feet of 6-inch and 3,150 feet of 8-inch water main, install 2,200 feet of 36-inch, 130 feet of 12-inch, 2,850 feet of 8-inch and 840 feet of 6-inch water main and reconnect 38 residential water services in 24th Street, Lake to Spencer Streets. This is phase 2 of this project. Last October you approved $1 ,665,000 for small diameter gas and water relocation work by the District's Construction Division. Phase 2 is mainly for the relocation of a 36-inch main. This phase is being joint contracted with the City's work. The relocation is necessary to eliminate conflicts with proposed sewer and paving installations by the City. The 36-inch main was originally installed in 1889. The 6-inch and 8-inch mains that are also being replaced during this phase are of the same vintage. The City is paying half the cost of the 36-inch main relocation ($478,016).

SYSTEM IMPROVEMENT AND MAINTENANCE

1. 1 00052001652 - $115,500 - Install 110 32-psig anodes on 2,180 feet of 12-inch bare steel gas main, 33rd and "L" Streets to 36th and Orchard Streets. This gas main has very low cathodic protection readings, indicating inadequate protection from corrosion. Bare steel mains require many sacrificial anodes installed close together and connected to the main for corrosion protection. Federal distribution integrity management program directs the District to attempt to improve cathodic protection on inadequately protected bare steel mains.

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Approved

2. 1 00051000992 - $55,000 - Install 400 feet of 6-inch water main from North 9th Street and Carter Boulevard to North 8th and Browne Streets. This water main is being installed to interconnect a long dead-end main that currently provides inadequate fire protection to residential customers along 13th Street and no fire protection at the end of the main which is adjacent to a City of Omaha maintenance building. The District has the potential to recover about a third of its investment through future connections to this main.

BUILDING, PLANTS AND EQUIPMENT

1. 100085000629- $145,000- Replacement of purge and trap gas chromatograph with mass spectrometer (GCMS). The GCMS is used for trihalomethane (THM) and other volatile organic chemical (VOC) analysis. THMs are formed when chlorinating water and are regulated by state and federal drinking water regulations. Many of the phases 1 and 2 improvements at Florence were driven by THM regulations. There are several VOCs that are regulated and more regulation is expected on VOCs. The GCMS allows for the determination of how much THMs are formed in the treatment process and is used to determine how to change water treatment to reduce THM formation. In particular, when to switch chlorine application points and when to turn on and off the aeration process. The current instrument was purchased in 2003 from Varian. In 2007, Varian was sold to several other companies. Several of the components of the District's GCMS have been discontinued and parts and support are no longer available.

2. 100084001125 - $295,000 - Refurbish Delaval compressor spare rotor. The District maintains a spare Delaval compressor rotor at the LNG Plant in case of a failure of the running unit. The rotors are custom built for the compressor with lead times of over a year and a $1 million replacement cost. The spare unit was inspected in February 2012 and found to need repair to bring into specifications for future use. This project will employ the original equipment manufacturer (OEM) to refurbish the unit and prepare it for long-term storage until needed during future compressor overhauls. This project will hire Siemens to refurbish the Delaval compressor rotor.

3. 100088000674- $500,000- Purchase 10 half ton, super cab, CNG, 4x4 pickups for various departments. Of the requested pickups, nine will be replacements and one is an additional truck for Engineering. The replacement pickups will be dispersed throughout several divisions. All 10 will be converted to dedicated CNG. All trucks being replaced are used on a daily basis. These trucks are driven an average of 1,500 miles a month. They have become too expensive to maintain and operate due to age and/or miles. Most of these trucks will have a topper installed over the bed area. The cost of the topper is included in the total cost of the trucks. The toppers being purchased are made specifically to fit the Ford F-150 trucks.

A BAF Technologies CNG conversion kit will be used and the conversions will be completed at the Omaha Truck Center. The gas gallon equivalent (GGE) for these trucks is 18 gallons and the CNG tanks will be placed under the body along the frame rails. In figuring the CNG practicality of the trucks, the cost of the conversion kit, the cost of CNG GGE, the target lifetime miles per trucks and the projection lifespan of the vehicle (11 years) were taken into consideration . The predicted payback is five years.

4. 100083000971 - $505,000 - Recarbonation expansion at Florence. Phase 2 projects of the Florence Capital Improvements Plan includes an expansion of the recently constructed recarbonation facilities. The Phase 1 improvements, completed in the fall of 2012,

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consisted of a new recarbonation facility to fully soften up to 50 MGD, which is about 1/3 of the total plant capacity, and planned to expand with future feed skids in future phases. The skid purchased was a sole source unit manufactured by TOMC02 as no other manufacturers were providing pressurized solution feed systems for C02. The cost of the TOMC02 feed skid was $350,000.

During the procurement of the Phase 1 equipment, an alternate system manufactured by BluelnGreen became available as a newcomer to the industry. However, this system had not been tested with C02 in a water plant the size of Florence. In order to provide the plant with a unit that could meet the EPA mandated disinfection by-product limits in 2012, it was determined that the best path forward was to purchase a single TOMC02 feed skid and plan to pilot test the BluelnGreen skid once the facilities were online and available to feed it. Permission was granted from NDHHS to construct a system without a redundant feeder until the competitive unit could be tested. Once the alternate unit was evaluated, the District could then choose to purchase the exact same TOMC02 unit for redundancy or if the BluelnGreen proved out and is more efficient, we would purchase it instead. Knowing that if the later choice was made the TOMC02 unit still would suffice for system redundancy.

In May 2013, BluelnGreen delivered a skid to Florence for a full scale testing of the unit on Florence's source water to use free of charge until August 2013. This test skid was provided to make sure the system could handle the wide varieties of conditions that Florence experiences. Also, the BluelnGreen touted a savings in supply water from our distribution system which could equal an operational cost savings which we were interested in providing by running it head to head with the TOMC02 unit. The efficiency of the BluelnGreen system surpassed expectations. The unit uses about one tenth of the carrier water and 25% less C02 to do the same treatment as the existing TOMC02 system which wi ll translate into about $100,000 a year operation savings by using the BluelnGreen system.

Shortly after the 2013 testing was performed, BluelnGreen provided a budgetary quote of $255,560 for their feed system which is $94,440 less than what was spent on the TOMC02 unit in 2012. Approval of this capital expenditure will authorize the President to approve a negotiated procurement agreement with BluelnGreen.

5. 100084001123 - $80,000 - RATIFICATION - Compressor building boiler line replacement at LNG. This request is for a ratification to replace the boiler line that runs underground from the boiler building to the compressor building and instrument air building at LNG. The existing line was found to be leaking and suffering from heavy corrosion. Remedial efforts were made by staff and a contractor to keep LNG in service during an extremely cold period. Without the heat to the compressor and instrument air buildings, LNG would be unable to vaporize. Approximately $30,000 of the work is complete.

INFORMATION TECHNOLOGY

1. 100086000656 - $50,000 - QA system upgrades. The ability to effectively test new or upgraded information systems is vital to the stability of the District's various IT systems. A key aspect of this is providing tools that allow for the automation of the process and simulation of load levels experienced by systems in production. The District owns two such testing systems, TOMS and Loadrunner. TOMS allows data to quickly be moved from production to test systems and Loadrunner is used to create scripts that can be played back during testing to

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emulate multiple users on a system. These funds will be used to fully implement and upgrade these systems.

2. 100086000657 ~ $1,200,000 - SAP/GIS upgrades and enhancements. This project involves upgrading the SAP, ERP and CRM system to the latest version and implementing the associated enhancements that the upgrade provides. The version upgrade ensures that the District's SAP system is current and contains the latest patches and updates. The enhancements include more advanced CRM functionality and improvements in usability to help the District sharpen its focus on its customers. For example, these enhancements would allow us to combine contract management and work management into one seamless transaction.

Scott L. Keep Senior Vice President, Operations

Approved :

/y~Doyle Interim President

SLK/sms

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REVISED METROPOLITAN UTILITIES DISTRICT Inter-Department Communication

February 27, 2014

Subject: BIDS ON MATERIALS AND CONTRACTS DURING THE MONTH OF FEBRUARY

To: Construction & Operations Committee cc: All Board Members, Doyle, Bucher, Keep, Schneider, and all Vice

Presidents

From: Jon Zellars, Purchasing

The following items will be on the March 5, 2014 Committee Agenda for consideration and the March 5, 2014 Board Agenda for approval. The recommended bid is balded and listed first.

lnstall12" Water Mains in Ft. Crook Rd ., North of Capehart Rd ., 100057000402 100057000403 1 00057002028 (WP 1305) Engineering Estimate: $311 ,633.00

Install Water Mains in The Prairies, Skyline Dr. and Frances St. 100055001104 (WP1312) Engineering Estimate: $353,541.00

Install Water Mains in Cedar Grove, 48th St. and Clearwater Dr. 100055001105 (WP 1313) Engineering Estimate: $165,730.00

CONTRACTS

Bids Sent I Rec'd

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32/2

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Page 1 of 3

Bidder Amount Bid

Cedar Construction $479,896.00 Kersten Construction 491,239.00

Kersten Construction $409,505.50 Cedar Construction 429,725.45

Cedar Construction Kersten Construction

$215,245.00 224,666.60

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Approved

JOINT CONTRACT RATIFICATION

Bids Rec'd Bidder Amount Bid

Joint Contract for OPW 51778; 24th 1 L.G. Roloff Const. $1,485,288.19 Street to 261

h St., Lake St. to Spencer St. 100053001268 100067001271 100093001122 100065001403 1 00095000963 (R 1639) Engineering Estimate: $1 ,102,165.00 (Per an agreement with the City of Omaha, an estimated $478,016.06 will be reimbursed to the District.) (A C&A in the amount of $2 ,000,000.00 will be presented to the Board on March 5, 2014 for approval.)

INFORMATION TECHNOLOGY

Item

Annual Subscription Fees for Success Factors

Annual Orcale Software License & Support (Listed for ratification)

Bids Sent I Rec'd

1/1

1/1

OTHER

Bids Sent I Rec'd

Bidder Amount Bid

SuccessFactors (SAP) $205,676.87

Orcale $276,838.74

Bidder Amount Bid

LNG Plant Pretreatment Skid Upgrade 9/1 D. R. Anderson $1 ,400,000.00 and Regeneration Heater Construction 100084001124 (GP 1757) (C&A for 100084001124 approved February 5, 2014 in the amount of $2,1 00,000.00)

CDOX Skid Unit- Florence Recarbonation 1/1 BlueinGreen $255,560.00 Expansion 100083000971 (WP 1342) (A C&A in the amount of $505,000.00 will be presented to the Board on March 5, 2014 for approval.)

Page 2 of 3

Ten (1 0) Half Ton, Super Cab, CNG, 4x4 Pickups 100088000674

6/4 Baxter Ford $334,070.00 Atchley Ford 336,050.00 Performance Ford 336,190.80 Sid Dillon Ford 337,930.00

(A C&A in the amount of $500,000.00 will be presented to the Board on March 5, 2014 for approval.)

Hydraulic Cylinder for Platte 3/3 Applied Ind. Tech. $27,099.60 West Filter Press Kriha Fluid Power $27,871 .02 100085000628 MSC Ind. Supply $34,408.67 (C&A for 100085000628 approved February 20, 2014 in the amount of $35,000.00)

Office Furniture for Engineering Back room 100090001214

2/2 Sheppard's Bus. Int. Payless Office Products

$94,755.79 111 ,000.30

(C&A for 100090001214 approved January 8, 2014 in the amount of $1 05,000.00)

ANNUALS

Bids Sent Item I Rec'd

Reconnect Water Services for District 32/4 Water Projects (Apri11 , 2014 through March 31, 2017)

Ductile Iron Single Rubber Gasket 9/2 Push Joint & Mechanical Joint Water Pipe with Pipe Lube & Polyethylene Wrap (March 31, 2014 through March 31, 2015)

a prove~ ~1 -Joseph cha Vice President, Accounting

~~c~ ~ ~=~~~r Vice President, Chief Financial Officer

Page 3 of 3

Bidder

Backlund Plumbing NBG Kersten Construction Hudco, Inc.

U.S. Pipe Omaha Winwater

Amount Bid

$2,308,760.00 2,478,875.00 2,892,776.25 3,178,820.52

$447,344.87 523,012.50

Director, Purchasing

~~ Mark E. Doyle Interim President


February 26, 2014

Subject: GAS INFRASTRUCTURE REPLACEMENT PLAN THROUGH 2016

To: All Board Members- Begley, Cavanaugh, Dowd, Friend, Frost, Lindsay, Patterson cc: Bucher, Doyle, Keep, Schneider, and All Vice Presidents

From: Stephanie L. Henn, Director, Plant Engineering

Overview

The District has an infrastructure replacement plan in place to remove and replace the approximately 450 miles of natural gas mains comprised of cast iron. Many of these mains have been in-service for a significant amount of time and replacement is now necessary. Therefore, it is important that we replace these mains as quickly as possible .

The District is required to adhere to all Department of Transportation (DOT) standards, as the DOT regulates the natural gas industry. Due to recent natural gas explosion incidents throughout the country, the Pipeline and Hazardous Materials Safety Administration (PHMSA), which is part of the DOT, has put a larger emphasis on the removal of cast iron gas mains from existing distribution systems.

While PHMSA has not mandated the removal of existing cast iron natural gas pipelines, it appears that it is just a matter of time before they do so. When this happens, there will be a prescribed time frame of how quickly the cast iron needs to be replaced . The District anticipates that this will be a shorter time frame than the District currently has planned to remove existing cast iron pipelines. Therefore, the farther along we are in the removal of all cast iron mains, the more advantageous it will be.

The District's current plan allows for all of the natural gas pipelines to be replaced within 15 years. While this sounds like an adequate amount of time, it is a very aggressive schedule to replace 450 miles of pipe.

This memo will outline our gas infrastructure replacement plan with both District employees and external gas contractors through the year 2016.

Background- 2012/2013/2014

The District began contracting gas installation work in 2012. Q3 Contracting was hired to perform this work for a term of 3 years. Shown in the following table, are the mains and services installed and the correspond ing approximate dollar amounts that 03 has completed or is slated to perform in calendar years 2012, 2013, and 2014:

Year Mains (miles) Services $ 2012 4.74 464 $1.6 million 2013 -9.3 -1256 -$4 million 2014 -13.3 -1600 -$5 million

Totals -27.3 -3320 -$10.6 million

Note: Numbers with- are approximate due to projects that have not yet been final paid .

It is significant that in addition to the amount of existing gas mains that District crews abandoned, contracted gas crews will have abandoned 27.3 additional miles in three years. This will obviously aid in abandoning existing gas mains quicker.

2015 I 2016 Plan

We plan to accelerate the infrastructure replacement program going forward . The goal is to replace 40 miles per year with a combination of both contracted work and District crews by the year 2018. The following table shows the anticipated amount of mains to be replaced in the next two years:

Mains to Be Replaced Year Contracted Crews District Crews Total

(miles) (miles) (miles) 2015 16 10 26 2016 20 10 30

We are currently budgeting for the amount shown in the above table for a total of 26 miles of replacement in 2015 and 30 miles in 2016 with a combination of District and contracted crews.

In order to replace 16 miles of gas mains by a contractor in 2015, we plan to have 3 contractors under contract. We plan to negotiate two of the contracts. One of the contracts will be a 2 year contract with Q3 for a total of approximately 20 miles of work (10 miles in 2015 and 10 miles in 2016). The other will be a one year contract with a smaller, local gas contractor for approximately 1 mile of work. We plan to bid a th ird (one year) contract with qualified gas contractors for an additional 5 miles of work.

Page 2 of 7

This plan will then continue into subsequent years . Based on this schedule, at least one gas contract will be bid each year, but not all contracts will require renewals in the same year. We will also have the flexibility to bid single, larger projects, as needed during the year.

Other Commitments of District Crews

Due to the recent slow economy, development growth has lagged in recent years. With less development type projects requiring the installation of new gas mains, District crews have been able to devote their time to infrastructure replacement projects, allowing the District to meet or exceed some of the recent infrastructure replacement goals.

However, we are now seeing a definite increase in development type projects, in both res idential subd ivisions and commercial projects. This will now require District crews to respond to these new customers' needs by installing new gas mains in development projects, thereby limiting the amount of t ime they will have for infrastructure projects.

In addition, the City of Omaha continues to accelerate their Combined Sewer Overflow (CSO) program. This also requires a large amount of the District crews' time, in order to keep up with the city's projects.

District crews are also spending much of their time on a record number of gas and water main breaks. This takes the crews away from infrastructure replacement projects , too, both during work hours and after hours.

Internal House Piping Change

The existing contract with Q3 Contracting states that the contractor shall install all gas mains, services, and internal house piping (including coordination with customers), set a meter, perform restoration to the surface of the ground, and then abandon the existing mains and services. After administering this contract for 2 years, it has become evident that having a contractor install the internal house piping may not be the best way to accomplish th is work.

When the District works on a gas infrastructure project, District construction crews handle all of the external gas work and the Field Services Division handles all of the internal piping. It makes sense to handle contracted gas projects in a similar way, with contracted construction crews handling all of the external work and Field Service handling all of the internal work.

Handling the project th is way allows for all of the District's existing work flow protocols to continue as usual, thereby allowing the project to be accomplished in a much smoother manner. Also, this approach will potentially save costs as the existing water meters also need to be changed out to automatically read meters. The Field Services Division currently is required to go back to a residence in which Q3 has installed gas internal

Page 3 of 7

piping in order to change out the water meter. This water work is not work that we currently task the gas contractor with .

With Field Services installing the internal piping for gas contracted projects, they can accomplish the water work at the same time. Also, while Field Services is in a customer's home, they will inspect the appliances, etc. and make sure that they are hooked up properly and everything is compliant.

Another benefit to having the District's Field Services Division performing this internal piping work is that they wear District issued uniforms. There have been many scams brought out in the media recently of others impersonating District personnel trying to gain access to customer's homes. Many times , 03 Contracting has encountered difficulty accessing customers' homes, as they are not District personnel and therefore, there is a lack of trust on the customer's part that 03 is actually working for the District. If the District performs this work, this obstacle is eliminated.

We had planned to implement District forces handling the internal piping on gas contracted projects in 2015. However, due to the fact that we plan to have 3 contractors performing this work next year, it makes sense to try it on a smaller scale in 2014. Therefore, we plan to try this scenario beginning early to mid-2014.

Of the 13 projects designed for 03 Contracting in 2014, 03 will perform house piping on 6 projects, which are located in North Omaha, and the District Field Services Division will perform internal house piping on 7 projects, which are located in South Omaha.

Providing that this plan for internal piping installation is a success, the District's Field Services Division will perform the internal piping into the future on both contracted and District projects .

Internal Piping Costs

Even with all of the benefits to the District performing the internal piping work, the obvious question is "Is it economical for District forces vs. Contracted forces to perform the internal piping work?" As shown in the table below, the answer is yes.

Contractor Crews District Crews Cost per House (internal piping onlyl $309.54 $204.78

These dollar amounts are adjusted for 2012 dollars. However, District crews are approximately $100 less expensive than contracted crews on the internal piping only. Further discussion of costs occurs later in this document.

Page 4 of 7

Additional Staff

In order to accomplish this additional internal house piping work in 2014, Field Services plans to add 5 people to their staff in 2014 with an additional 5 people in 2015 and more to follow in 2016 as we accelerate the infrastructure replacement program. The positions for 2014 are unbudgeted positions.

Also, to accelerate the infrastructure replacement program and to keep up with increased development, CSO projects , and main breaks, 12 additional people will be budgeted for, and hired in 2015 for the Construction Division.

Contracted vs. District Crew Costs

As the District has been contracting gas for approximately 2 years, it is a good time to compare costs between the contractor and District crews. These costs are based on projects from 2012, since the contracted gas projects from 2013 and 2014 do not have all of the final costs applied yet, due to restoration , etc. The costs can be seen in the following table:

Contractor Crews District Crews Cost per Foot of 2" Plastic Gas Main $41 .85 $28.06 Cost per Residential Gas Service $1 ,542 $2,813

These dollar amounts are a "weighted average" in order to take the size of the project into consideration . For example, a per foot cost will be higher on a small project and lower on a large project due to mobilization, etc. that is required on every project regardless of size. This is due to the economy of scale. Therefore, these are "weighted averages" so the size of the project is irrelevant. Also, these dollar amounts are in 2012 dollars.

As you can see in the above table, the cost per foot of gas main is higher for the contractor and lower for District crews and vice versa for residential services. Each residential gas infrastructure project includes both mains and services. In order to compare the contractor and District costs , both mains and services need to be taken into account. The following example brings this out:

Hypothetical Infrastructure Project:

• Residential Area • 1 mile of 2" plastic gas main to be replaced • 100 residential services to be replaced

Page 5 of 7

Contractor Crews District Crews Cost to Replace 1 Mile of 2" Plastic Gas Main $220,968 $148,157 Cost to Replace 1 00 Residential Services $154,200 $281,300

Total $375,168 $429,457

It should be noted that the way costs are applied to District projects internally is not an exact process. While District personnel make a very good effort to charge costs in the correct place, each division may charge items differently. For contracted work, costs are more closely monitored, since there is a signed contract and an exact dollar amount that have been agreed to between the contractor and the District.

It also should be noted that the cost totals shown in the above table for contractor crews DO NOT include the District's general and administrative overheads of 9.2%. It does, however, include all District inspection time and corresponding overheads, including OPEB (Other Post Employee Benefits). If the additional 9.2% were applied , the contractor crews total would be $409,683.

General and administrative overheads were not applied in the table because there has been a considerable amount of discussions internal to the District as of late speculating if these overheads should or should not be applied to all contracted projects.

Therefore, based on whether general and administrative overheads are applied or not, the contracted crews are either 12.6% or 4. 7% less expensive than District crews.

Also of note, 2012 was the first year contracting gas work. District inspection and contract administration staff had much to learn as we began this endeavor. Therefore, there are a significant amount of inspection hours charged to the contracted gas projects. We have seen this start to decline, but all of these 2012 projects have higher inspection costs. Because of this, the savings due to the contracted work should increase as time goes on.

Conclusion

It is important that the District act as quickly as possible to remove and replace the existing 450 miles of cast iron gas mains currently in the system.

Based on the information that in addition to District crews, contracted gas crews will have abandoned an additional 27 miles of gas mains over the last 3 years, and the need for District crews to devote more of their time to CSO projects, development projects, and main breaks, in order to accomplish the infrastructure replacement program aggressively, a combination of both District and contracted forces will be necessary.

Page 6 of 7

District forces will take over the internal piping work associated with the gas contract and some additional District staff will be added in both the Field Services and Construction Divisions. Three gas contractors will perform external gas work with each of these contracts coming up for renewal in different years.

The costs to contract or perform the work internally are similar, with savings on the contract side of between 4.7% and 12.6%. Therefore, a combination of contracted and District installed gas installation work provide a good plan to accomplish the goal of removing all of the cast iron gas mains from the District's system as quickly as possible.

No board action is required. This memo is for informational purpose

APPROVED:

Vice President, Engineering & Construction

Interim President

Steph nie L. Henn, P.E. Director, Plant Engineering

~p/'r~ Senior Vice President, Operations

Page 7 of 7


FEBRUARY 25, 2014

Subject: NOTICE OF PURCHASES BETWEEN $25,000- $50,000

To: All Board Members cc: Doyle, Bucher, Keep , Schneider, and all Vice Presidents

From: Jon Zellars , Purchasing

During the month of February the following item was purchased or contracted for and is being submitted to the Board to be placed on file . The purchase or contract was initiated with the low bidder which is bolded and listed first.

Item

Impeller for Rainwood Pump #2

Bids Sent I Rec'd

212

Bidder

Sulzer Pumps ATL Sales

Director, Purchasing

Debra A. Schneider

Amount Bid

$28,707.00 $34,759.65

Senior Vice President, Chief Financial Officer

Page 1 of 1

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Approved


February 24, 2014

Subject: ACCEPTANCE OF CONTRACTS AND PAYMENT OF FINAL ESTIMATES

To: Committee on Construction and Operations cc: all Board Members; Bucher, Doyle and Schneider; and all Vice Presidents

From: Scott L. Keep, Senior Vice President, Operations

Work has been satisfactorily completed on the following contracts and final payments are recommended:

Contract Board Amounts

Approval Date Bid Actual Final

a. Est. No. 8 - Ray Martin Company, 100083000922, Upgrade HVAC February 6, 2013 $1 ,730,250.00 $1 ,889,209.00 $188,920.90 system, Platte South

Comments: There were three change orders to the original bid for a total increase of $158,959.00. The change orders included rerouting the hot water return piping underneath the filter room, installing an automatic bypass valve at the end of the run of the chilled water piping, installing wireless thermostats, replacing deteriorating ductwork on the dehumidification unit, installing additional piping off the air wash unit, installing an exhaust fan for the welding shop, installing a control valve on the chilled water system and installing new diffusers in the lobby area.



b. Est. No. 5- CHI Engineering, 1 00072000802, Professional engineering services to replace July 24, 2013 $224,700.00 $285,200.00 $93,000.00 the hot oil regeneration heater, LNG

Comments: There was one change order in the amount of $60,500.00 to add design engineering services for the removal of existing water-cooled heat exchanger and addition of new air-cooler for E-205 regen cooler.

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c. Est. No. 1 -Johnson Controls, 100072000800, Professional engineering services to perform August 22, 2013 $17,050.00 $17,050.00 $17,050.00 an audit study of the York refrigeration unit, LNG

Comments: All work required by the contract has been completed by the contractor and is acceptable and in compl iance with the contract and specifications .

Approved:

)/l;tQ. Mark E. Doyle Interim President

.x:/ Jt4 ;;< -11'~ Scott L. Keep Senior Vice President, Operations

-2-

1.

2.


February 20, 2014

Subject: WATER MAIN EXTENSIONS

To: Services & Extensions Committee cc: All Board Members; Bucher, Doyle and Schneider; and all Vice Presidents

From: Scott L. Keep, Senior Vice President- Operations

The following water main extensions will be on the March 5, 2014 Committee Agenda for consideration and the March 5, 2014 Board Agenda for approval:

WATER

Job Number Project Cost Applicant Construction

M.U.D. Cost Contribution by Applicant

100055001104 $529,710 $600,417 - -

These mains are being installed to provide domestic water service and fire protection to 134 newly platted single-residence lots and one clubhouse lot in The Prairies Subdivision at Skyline Drive and Frances Street. There is a pioneer main fee in the amount of $70, 707 due to the existing 16-inch water main in 22~d Street. (City of Omaha zoning, Lanoha Development Company)



100057000402 $590,084 $590,084 - -100095001133 2,000 - - $2,000

$592,084

These mains are being installed to provide domestic water service and fire protection to a new facility at Offutt Air Force Base. This will be the fourth wholesale water connection point to the base, but they are not requesting an increase in the current demand capacity of the wholesale agreement. The proposed mains and wholesale meter will provide water service near the new facility and interconnect the District's mains in South Fort Crook Road which improves reliability to both this new connection and the original wholesale connection. The District's cost will be $2,000 to reconnect an existing water service to 12402 South Fort Crook Road. (City of Bellevue zoning, Offutt Air Force Base)

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100055001105 $271 ,593 $313,731 - -

3. These mains are being installed to provide domestic water service and fire protection to 75 newly platted single-residence lots in Cedar Grove Subdivision. There is a pioneer main fee in the amount of $42, 138 due to the existing 12-inch water main in 48th Street. (City of Bellevue zoning, Boyer Young Development Company)

c;;(J?A ~ J-{~ Scott L. Keep Senior Vice President-Operations

Approved :

1MA~ Mark E. Doyle Interim President

SLK/sms

-2-

REVISED


February 28, 2014

Subject: INCREASES FOR EMPLOYEES WITH SALARIES OVER $10,000 PER YEAR

To: Personnel Committee cc: Board Members and Messrs: Bucher, Doyle, Keep, Schneider

From: Patrick L. Tripp, Vice President, Human Resources

Promotional Increases - Bargaining Unit

Since the annualized wages for these employees is over $10,000 per year, Board approval of these increases is required. It is recommended that the Board of Directors approve these increases effective March 15, 2014.

Rafael Barraza, Meter Reader; Meter Reading Division; Customer Services Department; is being recommended for a promotion to the position of Water Maintenance Trainee; Water Distribution Division; Water Operations Department. Mr. Barraza's promotion would be from $22.70 per hour, which is the Step 2 wage for the Meter Reader job classification to $22.90 per hour, which is the Step 4 wage for the Water Maintenance Trainee job classification. ($47,632.00 per year based on 2,080 work hours.) Mr. Barraza has been with the District since October 03, 2011 .

Jesus Guevara, Water Plant Maintenance Mechanic; Platte West Division; Water Operations Department; is being recommended for a promotion to the position of Water Plant Operator; Platte West Division; Water Operations Department. Mr. Guevara's promotion would be from $28.61 per hour, which is the Step 4 wage for the Water Plant Maintenance Mechanic job classification to $30.56 per hour, which is the Step 4 wage for the Water Plant Operator job classification. ($63,564.80 per year based on 2,080 work hours.) Mr. Guevara has been with the District since July 21 , 2008.

Amy Williamson, Customer Account Clerk II; Customer Accounting Division; Rates, Regulatory Affairs, and Revenues Department; is being recommended for a promotion to the position of Cashier Ill; Cashiers Division; Rates, Regulatory Affairs, and Revenues Department. Ms. Williamson's promotion would be from $18.61 per hour, which is the Step 1 wage for the Customer Account Clerk II job classification to $20.47 per hour, which is the Step 2 wage for the Cashier Ill job classification. ($42,577.60 per year based on 2,080 work hours.) Ms. Williamson has been with the District since July 05, 2011.

Promotional Increases ~ Supervisory, Professional and Administrative

David Bellairs, Gas Scheduling Specialist; Gas Operations Department; is being recommended for a promotion to the position of Director, Energy Acquisitions; Gas Operations Department. Mr. Bellairs' promotion would be from the Grade M-06; to the Grade M-08 on the Supervisory, Professional and. Administrative Scale. Mr. Bella irs has been with the District since September 04, 2001 .

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Increase for Employees With Salaries Over $10,000 Per Year Page 2

In view of the additional responsibilities of this position as a Director, Energy Acquisitions; it is recommended that the President be authorized to increase the salary of Mr. Bellairs from $96,828 to $101 ,669 per year, effective March 16, 2014.

Sherri Meisinger, Senior Engineering Technician, Design; Engineering Design Division; Engineering and Construction Department; is being recommended for the position of Supervisor, Drafting; Engineering Design Division; Engineering and Construction Department. Ms. Meisinger would remain at the Grade M-03 on the Supervisory, Professional and Administrative Scale. Ms. Meisinger has been with the District since June 25, 1990.

In view of the responsibilities of this position as the Supervisor, Drafting; it is recommended that Ms. Meisinger's salary remain at $75,861 per year, the standard M-03 salary.

William Rice, Engineer I; Plant Engineering Division; Engineering and Construction Department; is being recommended for a promotion to the position of Supervisor, Gas Plants; Gas Production Division; Gas Operations Department. Mr. Rice's promotion would be from the Grade M-04; to the Grade M-06 on the Supervisory, Professional and Administrative Scale. Mr. Rice has been with the District since May 19, 2008.

In view of the additional responsibilities of this position as a Supervisor, Gas Plants; it is recommended that the President be authorized to increase the salary of Mr. Rice from $82,334 to $86,451 per year, effective March 16, 2014.

APPROVED: Date: J.. / J_f:' / L i Patrick L. Tripp Vice President, Human Resources


February 24, 2014

Subject: AUTHORIZATION FOR RATIFICATION OF SPA EMPLOYEES

To: Personnel Committee cc: Board Members and Messrs: Bucher, Doyle, Keep, Schneider

From: Patrick L. Tripp, Vice President, Human Resources

The District had a budgeted opening for a Network Specialist in the Information Technology Department. This letter requests authorization to ratify the annual salary of Shawn Hubbard as a Network Specialist.

Mr. Hubbard was hired at the salary of $73, 154; which is within the salary range for the Supervisory, Professional and Administrative Grade M-05. The Board has previously approved the Grade M-05 range of $73, 154 to $89,245.

This item will be on the agenda of the March Board meeting. It is recommended that the Board of Directors ratify Mr. Hubbard's annual salary of $73,154 as a Network Specialist. Your approval for this action is requested.

APPROVED: Date d- ( -.-q f t f ~~

Interim President

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February 28, 2014

Subject: THIRD LEGISLATIVE REPORT- 2014 SESSION

To: Judiciary and Legislative Committee

cc: All Board Members; Doyle, Bucher, Keep, Schneider; all Vice Presidents; Nowka

From: Rick Kubat, Government Relations Attorney

There are 25 days left in the 60-day session and the Legislature has many significant issues remaining to deal with, including tax modernization, prison reform, the Affordable Care Act, and water funding. At the end of this report are two new water funding bills for your consideration. Please find below legislative bills of interest for the District along with management's recommendations for lobbying purposes.

LB 823 (Lautenbaugh) - Calls for the termination or sale of the District by January 1, 2015. The Urban Affairs Committee received testimony on February 11 . Senator Lautenbaugh was the only proponent testifier. Opposition testimony was provided on behalf of the District by the Nebraska League of Municipalities, the Nebraska Municipal Power Pool and the League of Women Voters of Nebraska. Opposition letters were submitted by the Nebraska Power Association, Douglas County, Bellevue, Bennington, Fort Calhoun, La Vista, Springfield, Waterloo, and Yutan. The Committee has not indicated any intention of advancing LB 823 to the floor of the Legislature.

Board Position: Oppose. Status: Remains in the Urban Affairs Committee.

LB 1014 (Murante) - Allows the District to provide for seven election subdivisions composed of substantially equal population with compact and contiguous territory prior to February 1, 2016. LB 1014 has advanced to general file and has been given a priority designation from the Urban Affairs Committee. District Elections would begin in 2018, and the Board would have the authority to assign directors to represent districts irrespective of residency for the remainder of their term of office.

Board Position: Status:

Support contingent on mutually agreed upon terms. Urban Affairs Committee priority designation , placed on general file.

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Approved

LB 150 (Nordquist) - Introduced on behalf of the District, LB 150 eliminates the 2% statutory municipal fee for compressed natural gas (CNG) when used as a vehicular fuel. LB 150 also provides for a sales tax exemption for energy used in the processing, manufacturing, and refin ing of CNG. An amendment has been attached to LB 150 on behalf of Clean Energy to provide liquefied natural gas (LNG) with a "diesel gallon equivalent" to give LNG equal excise tax treatment to that which is placed on diesel fuel. On December 19, 2013, the District received a letter of support for LB 150 from the City of Omaha's Mayor, Jean Stothert. The bill is now on the floor of the Legislature.


Support. Placed on general file with a Revenue Committee amendment providing for a statutory sunset of January 1, 2020.

LB 760 (Mello) - Assists the City of Omaha in their efforts to finance the $2 billion Combined Sewer Overflow (CSO) project. LB 760 has two funding pools. Ninety percent of state sales tax revenue collected on an increase in monthly sewer use fees after July 1, 2013, will be returned to Omaha to assist with financing the CSO project. The remaining 10% of funds are available for other municipalities to apply for grant assistance in dealing with unfunded federal mandates. LB 760 will assist some rate payers within the District that are subject to the increase in Omaha's sewer fees related to the CSO project. Additionally, 10% of the funds would become available to the District via a grant process.

Board Position: Support. Status: Remains in the Revenue Committee.

LB 890 (Dubas) - Changes prov1s1ons relating to procedures for acquiring private property for public use. The bill proposes several changes to the eminent domain laws. LB 890 would require the Attorney General to develop and make available, in printed or electronic format, a pamphlet describing a private property owner's rights. The bill further adds notice requirements for the District when acquiring private property on and after January 1, 2015. Concerns exist around LB 890's requirement for notice of at least 45 days before negotiations to acquire property may begin . The 45-day notice would be cumbersome when time is a concern for the District, property owners, and developers.

Board Position: Oppose Status: Remains in the Judiciary Committee.

LB 1098 (Carlson) - Changes the membership and powers and duties of the Nebraska Natural Resources Commission (NRC). LB 1098 expands the Nebraska NRC to 27 members as recommended by the Water Funding Task Force Report published December 2013. The bill maintains 16 current members whom are primarily Natural Resource District representatives, and adds 11 members to be appointed by the Governor. The District will have representation as one of the 11 appointed seats. The newly formed Natural Resources Commission will make recommendations on funding for statewide water projects, programs, or activities to achieve water sustainability.


Support. Senator Carlson priority designation, remains in the Natural Resources Committee.

LB 122 (Lautenbaugh) - This is a carryover bill that appropriates $2,000,000 for an environmental study for the possible development of a hydroelectric dam on the Platte River near the 1-80 corridor.

Board Position: Oppose. Status: Remains in the Appropriations Committee.

LB 284 (Conrad) - This is a carryover bill and would raise the amount of allowable damages for matters brought under the Political Subdivisions Tort Claims Act from the current cap of $1,000,000 to $3,000,000 on claims by any one person out of a single occurrence. The cap for all claims from a single occurrence would be raised from $5,000,000 to $12,000,000. LB 284 extends the timeframe for notice of claims against political subdivisions from one year to two years. LB 284 hinders the District's ability to timely investigate tort claims and significantly raises the threshold of recoverable damages on claims.

Board Position: Oppose. Status: Remains in the Judiciary Committee.

LB 940 (Schilz) - Creates the Water Sustainability Fund and transfers cash reserve funds. The bill proposes a one time transfer of $50 million from the Cash Reserve to the newly created fund. The fund could only be used to fund programs, projects, and activities identified by the Water Funding Task Force for water sustainability projects.

Position: Neutral. Status: Remains in the Appropriations Committee.

LB 1046 (Carlson) - The bill creates the Water Sustainability Fund to be administered by the Natural Resources Commission. The fund shall be used for water sustainability projects throughout the state. The bill requires that on October 1, 2015, the State Treasurer shall annually transfer $50 million from the General Fund to the Water Sustainability Fund.

Position: Neutral. Status: Remains in the Appropriations Committee.

This matter will appear on the agenda of the March 5, 2014 J & L Committee meeting and Board agenda.

Approved :

~ ~--------k~-Mark Doyle Interim President

Gov~rprrney

ic ard A. Kubat

Subject:

To:

cc:

From:

METRO POUT AN UTILITIES DISTRICT Inter-Department Communication

February 25, 2014

SETTLEMENT OF CLAIM- NICOLE WALTER

Judiciary and Legislative Committee

All Board Members; Messrs. Doyle, Keep, Mrs. Schneider; and all Vice Presidents

Ronald E. Bucher, Senior Vice President, General Counsel

Ms. Nicole Walter was involved in an automobile accident with MUD personnel on September 7, 2011 , causing automobile property damage and personal injury to Ms. Walter. The property damage portion of this claim has been settled.

Since the accident, Ms. Walter was treated by numerous medical providers to address further medical and psychological issues related to the accident. During this time period , Ms. Walter has alleged she was unable to work at her previous occupation.

After extensive medical testing and review by independent medical examiners and subsequent extensive settlement negotiations, the District's Law Department believes it is in the best interest of the District to reach a settlement in this matter and avoid substantial trial expenses, as well as uncertain monetary exposure in this case. Based upon the Law Department's investigation and analysis of this matter, it is recommended the District settle the case in the amount of $210,500.

This matter will be on the March 5, 2014 Committee Agenda for discussion and the Board Agenda for consideration . The Board may go into a closed session during the Board Meeting for additional discussion if necessary.

~co---6~ Ronald E. Bucher Senior Vice President, General Counsel

Approved :

.-~~ Interim President

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