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DRAFT METROPOLITAN UTILITIES DISTRICT Committee Meetings & Public Hearing

8:15 a.m. January 2, 2019

AGENDA

1. Safety Briefing 2. Roll Call 3. Open Meetings Act Notice

Construction and Operations – Frost, Cavanaugh, Friend 1. Capital Expenditures [Ron Reisner, SVP & Chief Operations Officer] – Tab 6 2. Acceptance of Contracts and Payment of Final Estimates [Ron Reisner, SVP & Chief

Operations Officer] – Tab 7 3. Selection of Water Main Design Consultant [Ron Reisner, SVP – Chief Operations

Officer] – Tab 8 4. Bids on Materials and Contracts [Jon Zellars, Director of Purchasing] – Tab 9

Services and Extensions – Howard, Friend, Begley 1. Main Extensions [Ron Reisner, SVP & Chief Operations Officer] – Tab 11

Judicial and Legislative – Dowd, Cavanaugh, Howard 1. Authorization for Sale of Land at 28th & Chandler Road [Mark Mendenhall, SVP &

General Counsel] – Tab 12

Personnel – Begley, Frost, Friend 1. Wage and/or Salary Increases and Ratifications [Bonnie Savine, VP - Human

Resources] - Tab 14

Public Hearing – Committee of the Whole 1. Phase-In of 2019 Water Rate Increase [Deb Schneider, SVP & Chief Financial Officer]

– Tab 15 2. Invitation for Public to Comment

Public Hearing – Committee of the Whole

1. Douglas County’s Offer to Purchase the District’s Downtown City Block [Mark Mendenhall, SVP & General Counsel] & Management Recommendation for Sale of Downtown Office [Raied Stanley, SVP & Chief Information Officer] – Tab 13

2. Invitation for Public to Comment

DRAFT METROPOLITAN UTILITIES DISTRICT

Regular Meeting 9:00 a.m. January 2, 2019

AGENDA

1. 2. 3. 4.

5.

Roll Call Open Meetings Act Notice Pledge of Allegiance Approval of Minutes – Committee Meetings, Public Hearing & Regular Board Meeting for December 5, 2018 Election of Chairperson (new Chairperson presides) and Election of Vice Chairperson

CONSTRUCTION & OPERATIONS

6. 7. 8. 9.

10.

Capital Expenditures Acceptance of Contracts and Payment of Final Estimates Selection of Water Main Design Consultant Bids on Materials and Contracts Notice of Purchases Between $25,000 and $50,000

SERVICES &

EXTENSIONS 11.

Main Extensions

JUDICIAL &

LEGISLATIVE 12. 13.

Authorization for Sale of Land at 28th & Chandler Road (RESOLUTION) Douglas County’s Offer to Purchase the District’s Downtown City Block & Management Recommendation for Sale of Downtown Office (RESOLUTION)

PERSONNEL 14.

Wage and/or Salary Increases and Ratifications

ACCOUNTS, EXPENDITURES,

FINANCE & RATES

15. Approval of Phase-In for 2019 Water Rate Increase (RESOLUTION)

BOARD 16. 17. 18.

Appointment of Committees Other Matters of District Business for Discussion CLOSED SESSION – Real Estate Matters

METROPOLITAN UTILITIES DISTRICT

Minutes of Committee Meetings & Public Hearing

December 5, 2018

Safety Briefing Senior Vice President of Safety, Security and Field Operations Steve Ausdemore

provided a briefing regarding the District's safety and security protocol for all individuals in attendance at the Board Meeting in the event of an emergency.

Roll Call Chairman Dave Friend called the Committee Meetings to order at 8:15 a.m. On a

roll call vote, the following members were present:

Jack Frost Mike McGowan Gwen Howard

Tim Cavanaugh Jim Begley Dave Friend

Mark Doyle, Secretary and President

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

Mr. Dowd was absent.

Open Meetings Act Notice Chairman Friend advised those in attendance that a copy of the Open Meetings

Act was posted in the rear of the Board Room.

Chairman Friend reminded those in attendance that the Committee Meetings and Public Hearing were being livestreamed.

Recognition of United Way Members Chairman Friend introduced the members of the District's annual United Way

fundraising campaign who volunteered a great deal of time and energy in organizing activities and events that call attention to the community's human service needs. Chairman Friend recognized the co-chairs of the effort, Gene Jaworski and Vince Juarez, and the committee members: Greg Andrade, Pat Brennan, Will Carter, Raksha Chhetri, Justin Cooper, Tracey Coty, Connice Kelly, and Dave Smith. Employees and retirees who contributed to the effort raised more than $109,000 that will be used to directly serve members of the community in need of assistance.

Committee Meetings, Public Hearing & Regular Board Meeting December 5, 2018

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Construction and Operations - Frost, Cavanaugh, Friend Senior Vice President and Chief Operations Officer Ron Reisner reviewed the

proposed capital expenditures as outlined in his letter to the Committee dated November 16, 2018.

Mr. Reisner reviewed the proposed acceptance of contracts and payment of final estimates as outlined in his letter to the Committee dated November 19, 2018.

Director of Purchasing Jon Zellars reviewed the proposed bids on materials and contracts as outlined in his letter to the Committee dated November 26, 2018.

Services and Extensions - Howard, Friend. Begley Mr. Reisner reviewed the proposed main extensions as outlined in his letter to the

Committee dated November 20, 2018.

Marketing and Consumer Information - Cavanaugh, McGowan, Frost Vice President of Marketing and Rates Dave DeBoer reviewed the proposed 2019

Marketing budget as outlined in his letter to the Committee dated November 26, 2018.

Personnel - Begley, Frost. Friend Vice President Human Resources Bonnie Savine reviewed her letter to the

Committee dated November 21, 2018 regarding the District's employee wage and salary increases and ratifications.

Chairman Friend announced to the audience that the Public Hearing would begin and remain open until the conclusion of the regular Board Meeting, and that the public was invited to comment at the close of the Committee Meetings and at the close of the regular Board Meeting.

Public Hearing - Committee of the Whole Senior Vice President and General Counsel Mark Mendenhall opened the

discussion about the Douglas County Board's proposed purchase of the downtown MUD building, parking lots and annex. He pointed out that the topic was only intended for discussion purposes.

Mr. Mendenhall reported that the Douglas County Commissioners had requested an answer to its purchase proposal by January 10, 2019. Board Members commented on the absence of a written proposal from the County and after some discussion, concluded that a written offer was necessary if the MUD Board was to review and adequately assess the proposal in an open and transparent manner.

Chairman Friend invited members of the public to comment. Among those offering comments was Clare Duda, a Douglas County Commissioner representing himself, who stressed that the driver of the proposed purchase was the demand for additional courthouse space, and that the proposed juvenile justice facility was a wholly separate matter. He assured the MUD Board that the purchase of the MUD building to use as


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additional courthouse space would have the support of the County Board. Insofar as the Board's expressed preference for a written proposal, he indicated he would seek to add it to the agenda for the next County Commissioners' meeting on December 18th so that the subject could be reviewed by the MUD Board at its meeting on January 2, 2019.

At 9:15 a.m., Chairman Friend called for a brief recess.

Public Hearing - 2019 Budget At 9:21 a.m., Chairman Friend opened the Public Hearing on the proposed gas

rate schedule changes, water rate increase and the 2019 gas and water budget.

Manager of Rates and Regulatory Affairs Geneva Patterson provided an overview of the District's gas and water rate structure, and how it compares favorably with other similarly situated utility companies according to the 2018 Memphis Light Gas and Water Annual Survey. She noted there would be no gas rate increase for 2019, and an average residential customer should see a $3.32 per month reduction in their gas bills because of the anticipated decline in gas pricing over the course of the next year.

Vice President of Marketing and Rates Dave DeBoer addressed water infrastructure matters, specifically the proposed plan for accelerating the pace of water infrastructure replacement and applying a proposed increase in the commodity component of the water rates to finance it. He pointed out that the District currently is on track to repair over 500 water main breaks this year, an ever-increasing number, at a cost of at least $7.5 million per year. The repair costs and negative impact on customer experience is very burdensome, making it more prudent to devote revenue resources to accelerating the pace of replacing aging cast iron water mains to 30 miles (up from 7 miles) per year. For a typical average residence, this rate increase should amount to approximately $2.30 per month but will more than likely be offset by the anticipated decrease in the cost of gas.

Vice President of Accounting Joe Schaffart presented the proposed 2019 gas and water budget.

At 10:16 a.m., Chairman Friend asked if any Board Member or any other member of the public in attendance at the meeting had any comments they would like to share. There were none. Chairman Friend recommended that the regular Board Meeting follow immediately.

MED/mjm

~ Secretary and President


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METROPOLITAN UTILITIES DISTRICT

Minutes of Regular Board Meeting

December 5, 2018

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 10:16 a.m. on December 5, 2018.

Advance notice of the meeting was posted on the first floor of the Headquarters Building from November 7, 2018 to December 5, 2018. Notice of the meeting was published in The Omaha World-Herald on Sunday, November 25, 2018. The agenda of the meeting was available for public inspection at the office of the Secretary and President and delivered to Board Members on November 28, 2018. The agendas and accompanying board documents were posted to the M.U.D. website on November 30, 2018.

AGENDA NO.1 ROLL CALL

Chairman Dave Friend called the meeting to order at 10:16 a.m. On a roll call vote, the following members were present:

Jack Frost Mike McGowan Gwen Howard

Tim Cavanaugh Jim Begley Dave Friend

Mark Doyle, Secretary and President

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

Mr. Dowd was absent.

AGENDA NO. 2 OPEN MEETINGS ACT NOTICE

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

Chairman Friend announced that the regular Board Meeting was being livestreamed.

AGENDA NO. 3 PLEDGE OF ALLEGIANCE

Chairman Friend invited those who wished 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 FOR NOVEMBER 7, 2018

Mr. Begley moved to approve the minutes for the November 7, 2018 Committee Meetings and regular Board Meeting, which was seconded by Mr. Cavanaugh and carried on a roll call vote.

Voting Yes: Frost, McGowan, Howard, Cavanaugh, Begley, Friend Voting No: None

MINUTES FILE DOCUMENT NO. 137833

AGENDA NO. 5 CAPITAL EXPENDITURES

Mr. Frost moved to approve the capital expenditures as outlined in Mr. Reisner's letter to the Committee dated November 16, 2018, which was seconded by Mr. Begley and carried on a roll call vote.



AGENDA NO. 6 ACCEPTANCE OF CONTRACTS AND PAYMENT OF FINAL ESTIMATES

Mr. Frost moved to approve Management's recommendations with regard to the acceptance of contracts and payment of final estimates as outlined in Mr. Reisner's letter to the Committee dated November 19, 2018. The motion was seconded by Ms. Howard and carried on a roll call vote.



AGENDA NO. 7 BIDS ON MATERIALS AND CONTRACTS

Mr. Frost moved to approve Management's recommendations regarding bids for materials and contracts described in Mr. Zellars' letter to the Committee dated November 26, 2018. The motion was seconded by Ms. Howard and carried on a roll call vote.




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AGENDA NO. 8 MAIN EXTENSIONS

Ms. Howard moved to approve the main extensions as outlined in Mr. Reisner's letter to the Committee dated November 20, 2018. The motion was seconded by Mr. Begley and carried on a roll call vote.



AGENDA NO. 9 ANNUAL MARKETING BUDGET

Mr. Cavanaugh moved to approve Management's recommendations regarding the proposed annual marketing budget as outlined in Mr. DeBoer's letter to the Committee dated November 26, 2018. The motion was seconded by Mr. McGowan and carried on a roll call vote.



AGENDA NO. 10 WAGE AND/OR SALARY INCREASES AND RATIFICATIONS

Mr. Begley moved to approve the wage and salary increases and ratifications as outlined in Ms. Savine's letter to the Committee dated November 21, 2018, which was seconded by Mr. Cavanaugh and carried on a roll call vote.



AGENDA NO. 11 APPROVAL OF PROPOSED GAS RATE SCHEDULE CHANGES [RESOLUTION]

Mr. McGowan moved to approve the Resolution regarding the proposed gas rate schedule changes as outlined in Mr. DeBoer's letter to the Committee dated November 28, 2018. The motion was seconded by Mr. Begley and carried on a roll call vote.




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AGENDA NO. 12 APPROVAL OF PROPOSED WATER RATE INCREASE [RESOLUTION)

Mr. McGowan moved to approve the Resolution regarding the water rate increase as outlined in Mr. DeBoer's letter to the Committee dated November 28, 2018, which was seconded by Mr. Frost and carried on a roll call vote.



AGENDA NO. 13 APPROVAL OF PROPOSED GAS AND WATER BUDGET [RESOLUTION)

Mr. McGowan moved to approve the Resolution regarding the proposed gas and water budget as presented by Mr. Schaffart in the Committee meetings. The motion was seconded by Mr. Cavanaugh and carried on a roll call vote.



AGENDA NO. 14 OTHER MATTERS OF DISTRICT BUSINESS FOR DISCUSSION

Chairman Friend asked if any Board Member or member of the public in attendance at the meeting had any comments they would like to share. Many Board Members extended their appreciation to Mr. Schaffart and his team for the extensive and thorough preparation of the budget presentation.

AGENDA NO. 15 CLOSED SESSION - REAL EST ATE MATTERS

No closed session was deemed necessary for discussion of real estate matters.

Mr. Frost moved to adjourn the regular Board Meeting and the Public Hearing which was seconded by Mr. McGowan and carried on a roll call vote.

Voting Yes: Friend, Frost, McGowan, Howard, Cavanaugh, Begley Voting No: None


The meeting was adjourned at 10:25 a.m.

MED/mjm

~ 4 Secretary and President


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METROPOLITAN UTILITIES DISTRICT Inter-Department Communication

December 18, 2018

Subject: SELECTION OF A WATER MAIN DESIGN CONSUL TANT ---2019 THRU 2021

To: Committee on Construction & Operations - Jack Frost, Chairperson, Timothy Cavanaugh and Dave Friend cc: All Board members and Messrs. Doyle, Mendenhall, Reisner, Stanley, Ausdemore, Mrs. Schneider, and All Vice Presidents

From: Stephanie L. Henn, Director, Plant Engineering

Introduction

Additional engineering design services are continuing to be needed to accommodate the growing demands with both water infrastructure and water development type projects. Current Engineering staff resources are not adequate to meet these design staffing challenges. In order to meet these demands, Engineering is seeking the continuation of services of an outside engineering design consultant to supplement water main design work currently being handled by both District staff and consulted engineering staff.

HGM Associates ("HGM") is being recommended by the District Selection Team as the best qualified consultant to perform the design for water infrastructure and development projects for the District.

In early 2013, the District hired HGM to perform water design services. HGM has been performing well in this capacity and has been doing this work up to the present.

Selection Process

HGM was selected through the District's usual consultant selection process. The steps are as follows:

• District sends out a Request for Qualifications ("RFQ") to various consultants that the District feels are qualified to perform the work and publicly to the American Council of Engineering Companies ("ACEC")

• Qualifications packets submitted by Consultants • District selection team reviews the qualification packets (The District's selection

team was comprised of 6 members from both of the Engineering divisions.) • Based on the qualification packets, the District selection team determines which

consultants are qualified to submit proposals • District sends out Request for Proposals ("RFP") to qualified consultants • Proposal packets submitted by Consultants

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• District selection team reviews the proposal packets & determines the most capable consultants to perform the work ("short list") (The District's selection team evaluated each proposal based on the consultant's qualifications, previous relevant experience, project personnel, approach to the work and unique aspects each firm would bring to the project.)

• District selection team reviews the consultants proposed cost, submitted in a sealed envelope. Proposed costs are not reviewed until proposals have been evaluated and "short list" has been determined.

• District selection team interviews the "short list" consultants • District selection team determines which consultant is best suited to perform the

work at a reasonable cost. Cost is taken into consideration as a secondary priority to the rest of the selection criteria.

• District selection team submits a recommendation to the MUD board to hire the selected consultant

This process has currently taken 6 to 9 months to complete.

Selected Consultant

HGM is being recommended as the selection team's choice as the consultant best qualified to perform water design services for the District.

HG M's team has a significant amount of water main design experience. They have completed many successful water main extensions and relocation designs for MUD, and perform similar water design work for other utilities. They have performed this type of work for the City of Council Bluffs for many years. Also, HGM demonstrated the best understanding of the District's Water Standards, drafting needs, and design methodology.

The HGM project team is well organized for MUD work. Their team structure appears efficient, and its members are experienced, cohesive, and focused on water design. They also made a strong commitment to maintaining their core team members' roles on MUD projects for the foreseeable future.

HGM discussed their ability to adapt to MUD's needs and expand the team if project workload should demand it. They indicated that they would continue to be cautious with expanding the team. This is to ensure the individuals working on District projects are a good fit and that a high level of competency with the District's standards and methodology is maintained. This indicates that HGM understands the District's needs for consistency and expects the highest quality of design work.

HGM's estimated design hours and costs were reasonable compared to the other consultants and with MUD's past experience.

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Conclusion

The District's selection team went through the selection process for a water design consultant in 2013. HGM was hired at that time and has performed quality work for the District. There was a significant learning curve in this process. It required one to two years of effort by HGM, and corresponding effort by District personnel, for HGM to get up to speed with the District's requirements, design specifications, and drafting standards.

It has been a positive experience to go through this process again in 2018 to ensure that the District has a qualified, competent consultant to perform water design services at a reasonable cost.

In conclusion, the selection team recommends that HGM Associates be selected as the District's water design consultant. You approval is requested.

APPROVED:

~~ Cory J. O'Brien Vice President, Engineering & Construction

Mark A. Mendenhall General Counsel

Step nie L. Henn Director, Plant Engineering

Senior Vice President Chief Operating Officer

]lz~Ml. MarkE.D~ President

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