OFFICIAL PROCEEDINGS OF THE

BOARD OF WATER, ELECTRIC,

AND COMMUNICATIONS TRUSTEES

THE CITY OF MUSCATINE, IOWA

APRIL 29, 2014 - 5:30 P.M.

The Board of Trustees met in regular session at Muscatine Power and Water's

Administration/Operations

Building, 3205 Cedar Street, Muscatine, Iowa, on Tuesday, April

29, 2014, at 5:30 p.m.

Chairperson Doyle Tubandt called the meeting to order. Members of the Board were

present

as follows: Trustees Tracy McGinnis, Warren Heidbreder, Steven Bradford, Joan

Axel, and Doyle Tubandt.

Also present were Sal LoBianco, General Manager of Muscatine Power and Water; Jerry

Gowey, Board Secretary;

Charles Potter, Muscatine Journal; Erika Cox, Brandy Olson, Tim

Reed, Gage Huston, and Brenda Christensen of Muscatine Power and Water (MP&W).

Chairperson Tubandt asked if there was anyone in attendance who wished to make any

public comments. There were no public comments.

The minutes of the March 27, 2014, regular meeting were presented as previously sub-

mitted

to all Board members in written form. Trustee Bradford moved, seconded by

Trustee McGinnis,

that the March 27, 2014, meeting minutes be approved as submitted.

After discussion,

all Trustees present voted aye. Motion carried

Meeting minutes of the

March

24, 2014, Audit/Finance Committee Meeting were received and placed on file.

The list of expenditures and transactions for March 2014 was presented as previously sub-

mitted

to all Board members in written form. After review and discussion of the

expenditures, Trustee McGinnis moved, seconded by Trustee Heidbreder,

to ratify

payment

of $9,175,996.89 for the Electric Utility, $341,104.76 for the Water Utility, and

with the 2014 Operating Budget with a combined expenditure of

$360,690. The scope of the projects have since been thoroughly defined and estimated to

include the correct type of material, quantity of pipe and service, and Utility

labor/materials

The Palm Street Water Main Replacement Project cost has a revised

expenditure

of $160,690 (increase of $66,640) and the Park Avenue Water Main

Replacement Project has a revised expenditure of $196,150 (decrease of $70,490) for a

combined net decrease

of $3,850. After additional discussion, Trustee Axel moved,

seconded by Trustee Heidbreder,

that the revised project summary forms for the Palm

Street Water Main Replacement Project and the Park Avenue Water Main Replacement

ITEM 12B

Board Minutes

April 29,

2014

Page 2 of8

Project be approved for a combined amount of $356,840. All Trustees voted aye. Motion

carried.

The next agenda item was a recommendation

to tentatively approve plans and

specifications

of the 2014 Water Main Replacements - State Revolving Loan Fund Projects

and set dates for the receipt of bids and to conduct a public hearing for these projects.

These

water main replacement projects include construction of 4, 775 feet of 6-8" Ductile

Iron Pipe (DIP} and High Density Polyethylene (HOPE) water mains and were approved by

the Board with

the 2014 Operating Budget, and as subsequently revised, for a total

expenditure of $766,990. These projects have been identified as being eligible for a low

interest loan from the State Revolving Loan Fund (SRF), which is one of Iowa's primary

sources

of financing drinking water and wastewater infrastructure projects. SRF has pre-

approved

the projects. There is an expected 2% interest rate on the loan balance including

a 0.25% servicing fee with a term of up to 20 years; there is also a 0.50% origination fee.

The

final loan program terms and documentation are expected to be issued soon.

Currently, IDNR is conducting an environmental review for the Palm Street Water Main

Replacement

Project due to its historical/environmental review process (the other water

main

replacement projects were granted exclusion); once this review is completed, SRF

requires a public notice and hearing to be conducted by MP&W. In this case, the Utility will

follow its normal Competitive Bid procurement process and hold a public hearing on the

intended borrowing,

but also have an additional IDNR required public hearing. It was asked

that the Board tentatively approve plans and specifications for performing this work and

appoint Mr. Ryan Wilson, MP&W Project Engineer, to conduct the IDNR required public

hearing on the Board's behalf and approve the dates and times that have been established

for the Competitive Bid and other public hearings. After discussion and additional review of

the project, the following resolutions were submitted:.

RESOLUTION 14-07

WHEREAS, revised plans and specifications have been prepared for the 2014

Water Main Replacements - State Revolving Loan Fund Projects; and,

WHEREAS, said proposed plans and specifications and proposed form of con

tract were

now on file with the Secretary of the Board and the Board finds the

same were in

substantial conformity with the requirements necessary to carry

out said plans; now therefore,

BE IT RESOLVED, by the Board of Water, Electric, and Communications

Trustees of the City of Muscatine, Iowa, that the plans and specifications in

the proposed form for the 2014 Water Main Replacements - State Revolving

Loan Fund Projects were tentatively approved; and,

BE IT FURTHER RESOLVED that the date of May 8, 2014 at 3:00 p.m., CST, was

hereby set for receipt of bids on said project at which time the Board's duly

appointed representative was hereby authorized, empowered, and directed

to receive, open and read aloud all sealed bids, and receive and record all oral

Board Minutes

April 29

2014

Page 3 of8

bids, and keep a written record of said proceedings and notice to bidders;

and,

BE IT FURTHER RESOLVED, that the hearing on said plans and specifications

and proposed form

of contract as provided by statute, be held in the office of

the Board of Water, Electric, and Communications Trustees of the City of

Muscatine, Iowa, on May 27, 2014, at 5:28 p.m., CST, and notice to bidders be

published not less than four (4) days nor more than twenty (20) days prior to

said hearing all as required by the Code of Iowa.

Trustee Axel moved, seconded by Trustee McGinnis, that the said resolution should be

passed, approved, and adopted on this 29th day of April 2014. Trustees McGinnis,

Heidbreder, Bradford,

Axel, and Tubandt voted aye. Voting nay, none.

RESOLUTION 14-08

RESOLUTION FIXING DATE FOR A MEETING ON THE AUTHORIZATION OFA

LOAN AND DISBURSEMENT AGREEMENT AND THE ISSUANCE OF NOT TO

EXCEED $766,990.00 WATER REVENUE CAPITAL LOAN NOTES OF

MUSCATINE POWER AND WATER, MUSCATINE, /OWA, AND PROVIDING FOR

PUBL/CATION OF NOTICE THEREOF

WHEREAS, it is deemed necessary and advisable that Muscatine Power and

Water, Muscatine,

Iowa (the "Issuer") should provide for the authorization

of a Loan and Disbursement Agreement and the issuance of Water Revenue

Capital Loan Notes, in the amount of not to exceed $766,990

00, as

authorized by Sections 384.24A and 384.83, Code of Iowa, as amended, for

the purpose

of providing funds to pay costs as hereinafter described; and

WHEREAS, the Issuer has applied for a loan through the Iowa Drinking Water

State Revolving Fund Program pursuant to which the Iowa Finance Authority

has agreed to purchase the Notes and has requested that such Notes be

issued as a single Note in a denomination equal to the total amount of the

issue

as authorized by Chapter 384 of the Code of Iowa; and

WHEREAS, the Loan and Disbursement Agreement and Note shall be

payable solely and only out of the net earnings of the Municipal Water

Utility and shall be a first lien on the future net earnings of the Utility; and

shall

not be general obligations of the Issuer or payable in any manner by

taxation and the Issuer shall be in no manner liable by reason of the failure

of the net revenues to be sufficient for the payment of the Loan and

Disbursement Agreement and Note; and

WHEREAS, before a Loan and Disbursement Agreement may be authorized

and Water Revenue

Capital Loan Notes issued to evidence the obligation of

the Issuer thereunder, it is necessary to comply with the provisions of the

Code of Iowa, as amended, and to publish a notice of the proposal and of

Board Minutes

April 29

2014

Page 4 of8

the time and place of the meeting at which the Board proposes to take

action

for the authorization of the Loan and Disbursement Agreement and

Notes and to receive oral and/or written objections from any resident or

property owner of the Issuer to such action.

NOW, THEREFORE,

BE IT RESOLVED BY THE BOARD OF TRUSTEES OF

MUSCATINE POWER AND WATER, MUSCATINE, IOWA:

Section

That this Board met at 3205 Cedar Street, Muscatine, Iowa, at

5:30 p.m., on the 29th day of April, 2014, for the purpose of taking action on

the

matter of the authorization of a Loan and Disbursement Agreement and

the issuance of not to exceed $766,990.00 Water Revenue Capital Loan

Notes to evidence the obligations of the Issuer thereunder, the proceeds of

which will be used to provide funds to pay the costs of acquisition,

construction, reconstruction, extending,

remodeling, improving, repairing

and equipping

all or part of the Municipal Water Utility, including those

costs associated

with improvements, replacements, and extensions to the

municipal water system.

Section

2. That the Secretary is hereby directed to cause at least one

publication to be made of a notice of said meeting, in a legal newspaper,

printed

wholly in the English language, published at least once weekly, and

having general circulation in said Issuer, said publication to be not less than

four (4) days nor more than twenty (20) days before the date of said public

meeting on the issuance of the Notes.

Section

3. The notice of the proposed action shall be in substantially the

following form:

NOTICE OF MEETING OF THE BOARD OF TRUSTEES OF MUSCA TINE

POWER AND WATER, MUSCATINE, IOWA ON THE MATTER OF THE

PROPOSED AUTHORIZATION OF A LOAN AND DISBURSEMENT

AGREEMENT

AND THE ISSUANCE OF NOT TO EXCEED $766,990.00

WATER REVENUE CAPITAL LOAN NOTES, AND THE PUBLIC HEARING

ON THE AUTHORIZATION AND ISSUANCE THEREOF

PUBLIC NOTICE is hereby given that the Board of Trustees of

Muscatine Power and Water, Muscatine, Iowa, will hold a public

hearing at 5:26 p.m., on the 27th day of May, 2014, at 3205 Cedar

Street, Muscatine, Iowa, at which meeting the Board proposes to

take additional action for the authorization of a Loan and

Disbursement Agreement by and between the Issuer and the Iowa

Finance Authority, and the issuance to the Iowa Finance Authority of

not to exceed $766,990.00 Water Revenue Capital Loan Notes to

evidence the obligations of the Issuer under said Loan and

Disbursement Agreement, in order to provide funds to pay the costs

of acquisition, construction, reconstruction, extending, remodeling,

Board Minutes

April 29,

2014

Page

of8

improving, repairing and equipping all or part of the Municipal Water

Utility,

including those costs associated with improvements,

replacements, and extensions to the municipal water system.

The

Notes will not constitute general obligations or be payable in any

manner

by taxation, but will be payable from and secured by the net

revenues of the Municipal Water Utility.

At the above meeting the Board shall receive oral or written

objections from any resident or property owner

of the Issuer, to the

above action. After

all objections have been received and considered,

the Board

will at this meeting or at any adjournment thereof, take

additional action for the authorization

of said Loan and Disbursement

Agreement and the issuance

of Notes or will abandon the proposal to

issue the Notes.

This Notice is given by order of the Board of Trustees of Muscatine

Power and Water, Muscatine, Iowa, as provided by Sections 384.24A

and 384.83

of the Code of Iowa, as amended.

Dated this

29th day of April, 2014.

Jerry Gowey

Secretary

of Muscatine Power and Water,

Muscatine,

Iowa

(End of Notice)

Trustee Heidbreder moved, seconded by Trustee Bradford,

that the said resolution should

be passed, approved, and adopted on this

29th

day of April

2014.

Trustees McGinnis,

Heidbreder, Bradford,

Axel, and Tubandt voted aye. Voting nay, none.

RESOLUTION 14-09

WHEREAS, it appears in a written report from the Board's staff that a required

public hearing for the Department of Natural Resources on the

2014

Water

Main Replacements - State

Revolving Fund Projects should be conducted;

now therefore,

BE IT RESOLVED, by the Board of Water, Electric, and Communications

Trustees

of the City of Muscatine, Iowa that a public hearing be conducted on

the said project in the office of the Board of Trustees on June

26, 2014

2:00

p.m. CDT and notice to the citizens be published not less than four (4) days

nor more than twenty

(20)

days prior to said hearing, at which time the

Board's

duly appointed representative is hereby authorized, empowered, and

directed

to receive all oral and written comments from any resident or

property

owner of the Issuer, and keep a written record of said proceedings;

and

Board Minutes

April 29,

2014

Page 6 of8

BE IT ALSO RESOLVED, by the Board of Water, Electric, and Communications

Trustees

of the City of Muscatine, Iowa that written comments will need to be

received and placed into the written comments by the close of business on

June

25, 2014.

Trustee Bradford moved, seconded by Trustee McGinnis, that the said resolution should be

passed, approved, and adopted on this

29th

day of April

2014.

Trustees McGinnis,

Heidbreder, Bradford,

Axel, and Tubandt voted aye. Voting nay, none.

Mr. LoBianco next introduced a recommendation

to approve a revised project summary

form the

A/O Center Roof Replacement Phase

Project with an expenditure of

$181,815

for an increase of

$71,815;

this project was originally submitted and approved with the

2014

Operating Budget. Mr. LoBianco explained that the scope of the original project

included only replacing only one section

of the A/O Center roof with remaining roof

sections budgeted for replacement in future years. Due to the many roof leaks that were

repaired last year and the many new

leaks that have occurred over the recent winter

months, two additional roof sections should be completed this year leaving only one

remaining section

to be replaced in

2015.

He concluded that an asphalt repair project

budgeted

for

2014

would be deferred to

2015

to partially offset the additional cost for this

project.

After additional discussion, Trustee McGinnis moved, seconded by Trustee Axel,

that the revised project summary forms for the A/O Center Roof Replacement Phase 1

Project be approved for an amount of

$181,815.

All Trustees voted aye

Motion carried

Next, Mr. LoBianco advised

that it was management's recommendation that rates for MPW

Digital

TV be adjusted effective May

1, 2014,

due to the Utility declining participation in the

agreement between National

Cable Television Cooperative (NCTC) and content provider

Viacom due

to unreasonable rates required in the new contract. A Customer Survey was

performed and with overwhelming customer support, Viacom programming

(19

networks)

will be removed from MPW Digital TV as of May

1, 2014.

It is being recommended that the

Board approve a

new Select tier price of

$61.99,

a decrease of

$2.00.

It is also being

recommended

that the General Manager continue to be responsible for approving tier

pricing, premium services, equipment fees, promotional packages, and discounts

to assure

the financial viability

of the Communications Utility; this would include a decrease at this

time

to the Preferred tier, making it a price of

$72.99,

a decrease of

$3.00.

No other pricing

changes are recommended

for Board approval at this time. After additional discussion, the

following resolution was submitted.

RESOLUTION 14-10

WHEREAS, review of the financial condition of the Communications Utility has

been completed and reviewed with the Board of Water, Electric, and

Communications Trustees (Board) for its consideration; and,

WHEREAS, the Board has reviewed this information and determined that a

revenue decrease

is in order; now therefore,

Board Minutes

April 29, 2014

Page 7 of8

BE IT RESOLVED, by the Board of Water, Electric, and Communications

Trustees of the City of Muscatine, Iowa, that effective for services received on

or after May

1, 2014,

the Communications Utility's price structure for MPW

DigitalTV

Select service shall by

$61.99

per month; and,

BE IT FURTHER RESOLVED, that the General Manager of Muscatine Power and

Water shall continue

to be responsible for approving price tiers, premium

services, equipment fees, promotional packages, and discounts

for all

Muscatine Power and Water's

Communications services as deemed necessary

to ensure the financial viability of the Communications Utility; and

BE IT FURTHER RESOLVED, that proper notice be given to consumers in

accordance

with the terms of the contracts, Federal Communications

Commission

(FCC) and Iowa State Code.

Trustee Bradford moved, seconded by Trustee Axel, that the said resolution should be

passed, approved, and adopted on this

29th

day of April

2014.

Trustees McGinnis,

Heidbreder, Bradford, Axel, and Tubandt voted

aye. Voting nay, none.

Mr. LoBianco stated

that the

2013

Muscatine Power and Water Annual Report has been

completed and introduced Ms. Cox to present the report. Ms. Cox pointed out that the

annual reports had been distributed

to each of the Board members and asked if they had

any questions about the report.

She went on to explain how and to whom the annual

report, along with the tri-fold highlights summary report, would be distributed to, including

customer/owners and employees. Ms. Cox told the Board that Sycamore Printing was in

the first year of a three year publication contract and that staff at Sycamore Printing were

very good

to work with, met all deadlines, and produced a quality report. Trustee

Heidbreder moved, seconded by Trustee McGinnis,

that the

2013

Annual Report be

received and placed on file as submitted. All Trustees present voted aye. Motion carried.

Mr. LoBianco reminded

the Board that the revised Service Rules were presented to the

Board

of Trustees at the March Board meeting for information and review. No additional

feedback was received from the Board regarding the Service Rules. After discussion Trustee

McGinnis moved, seconded by Trustee Bradford,

to approve the Service Rules for the

Water,

Electric, and Communications Utilities as presented at the March

27, 2014,

Board of

Trustees Meeting. All Trustees present voted aye. Motion carried.

In the General Manager's report, Mr. LoBianco reviewed his previously submitted memo-

randum

that included an update submitted by Ms. Olson regarding the APPA Legislative

Rally and write-up submitted by Mr. Huston regarding the MISO Capacity Auction Results

for

2014-2015.

The report also recognized MP&W's achievement of the APPA RP3

Designation; MP&W received its first ever Diamond designation during the recent APPA

Engineering and Operations Technical Conference. Mr. LoBianco continued that only six

other Utilities achieved this distinction for the

2013

application period and thanked the

employees who had completed

the assessment resulting in a score of

100

out of

100

points

for MP&W

Board Minutes

April 29,

2014

Page 8 of8

The YTD and March Financial Operating Statements and Balance Sheets and Quarterly

Investment

Report were presented as previously submitted to all Board members in

written form. Mr. LoBianco stated that financials would be covered in the Key Performance

Indicators presentation. Trustee Axel moved, seconded by Trustee Bradford, to receive and

place on file the YTD and March Financial Operating Statements and Balance Sheets for the

Water,

Electric, and Communications Utilities and the Quarterly Investment Report. All

Trustees present voted aye. Motion carried.

The Quarterly Project

Status Report and Variance Analysis were presented as previously

submitted to all Board members in written form. Trustee McGinnis moved, seconded by

Trustee Bradford, to receive and place on file the Quarterly Project Status Report and

Variance Analysis. All Trustees present voted aye. Motion carried.

The

Critical Issues and Key Performance Indicators for the Water, Electric, and Communi-

cations Utilities were previously submitted to all Board members in written format. Mr.

LoBianco asked each critical issue

leader to review the status of their critical issue and

stated that Mr. Gowey would review the key performance indicators. After review and

discussion, Trustee Heidbreder moved, seconded by Trustee Axel, to receive and place on

file the First Quarter 2014 Critical Issues and Key Performance Indicators for the Water,

Electric, and Communications

Utilities. All Trustees present voted aye. Motion carried.

The Competitive Quotes

for Public Improvements Report was presented as previously

submitted

to all Board members in written form. There were no items for approval.

The March departmental reports were presented as previously submitted to all Board

members in

written form. Trustee McGinnis moved, seconded by Trustee Axel, to receive

and place on

file the March departmental reports. All Trustees present voted aye. Motion

carried.

The meeting was adjourned at 7:25 p.m.

BOARD OF WATER, ELECTRIC, AND

COMMUNICATIONS TRUSTEES OF THE

CITY OF MUSCATINE, IOWA

Board Secretary