Board Policy Committee
Meeting and Special SMUD
Board of Directors' Meetin'g
Date: Wednesday, April 18, 2018 Time: Scheduled to begin at 5:30 p.m.
Location: SMUD Customer Service Center, Rubicon Room 6301 S Street, Sacramento, CA
Powering forward. Together. *SMUff AGENDA BOARD POLICY COMMITTEE MEETING AND SPECIAL SMUD BOARD OF DIRECTORS MEETING
Wednesday, April 18, 2018 SMUD Customer Service Center, Rubicon Room 6301 S Street, Sacramento, California Scheduled to begin at 5:30 p.m.
This Committee meeting is noticed as a joint meeting with the Board of Directors for the purpose of compliance with the Brown Act. In order to preserve the function of the Committee as advisory to the Board, members of the Board may aftend and participate in the discussions, but no Board action will be taken. The Policy Committee will review, discuss and provide the Committee's recommendation on the following:
DISCUSSION ITEMS
1. Jim Alves a. Accept the monitoring report for Strategic Direction SD-13, Economic Development Policy. b. Discuss, with possible amendment, Strategic Direction SD-13, Economic Development Policy. Presentation- 15 minutes Discussion.- 10 minutes
2. Maria Veloso Koenig a. Accept the monitoring report for Strategic Direction SD-14, System Enhancement. b. Discuss, with possible amendment, Strategic Direction SD-14, System Enhancement. Presentation- 10 minutes Discussion- 10 minutes
3. Bill Slaton Board monitoring: BL-1, Board-Chief Executive Officer and General Manager Relationship; BL-2, Board-Chief Legal Officer and General Counsel Relationship; BL-3, Board- Internal Auditor Relationship; BL-4, Board-Special Assistant Relationship. Presentation- 5 minutes Discussion: 5 minutes
4. Claire Rogers Approve revisions to Board-Staff Linkage BL-3, Board-internal Auditor Relationship. Presentation- 5 minutes Discussion: 5 minutes Board Policy Commiftee and Special SMUD Board of Directors Meeting Agenda Page 2 April 18, 2018
INFORMATIONAL ITEMS
5. Gregg Fishman Board Work Plan. Discussion: 5 minutes
6. Public Comment.
7. Bill Slaton Summary of Commiftee Direction. Discussion: 1 minute
Members of the public wishing to address the Committee should complete a sign-up form available at the table outside of the meeting room. Members of the public shall have up to three (3) minutes to provide public comment. The total time allotted to any individual speaker shall not exceed nine (9) minutes for the entire Committee meeting time.
Members of the public wishing to inspect public documents related to agenda items may call 916- 732- 7143 to arrange for inspection of the documents at the SMUD Customer Service Center, 6301 S Street, Sacramento, Califomia.
NOTE: Accommodations are available for the disabled public. If you need a hearing assistance device or other aid, please call 916-732-6147 in advance of this Committee Meeting.
SSS No. CEDEE 18-002 Committee Meeting & Date BOARD AGENDA ITEM Policy Committee STAFFING SUMMARY SHEET April 18, 2018 Board Meeting Date April 19, 2018
TO TO
1 Claire Rogers 6. Jennifer Davidson
2. Erica Manuel 7.
3. Farres Everly 8.
4. Nicole Howard 9. Legal
5. Paul Lau 10. CEO & General Manager No If no, Consent schedule a No (If no, explain in CostIBudgeted Yes Budgeted Yes Calendar dry run section) e ntation. MAIL DATE FROM (IPR) ]tPA`RTMENT sen a" EXT. STOP SENT Jim Alves EConomic Development A353 5477 4/6/2018 NARRATIVE: Requested Accept the monitoring report for Strategic Direction SD- 13, Economic Development. Action: Discuss, with possible action amendment, Strategic Direction SD- 13, Economic Development. Summary: The annual Economic Development Report summarizes accomplishments and status of SD- 13 performance by SMUD for the period of January I — December 31, 2017. Board Policy: SD-13 Economic Development policy states: "Promoting the economic vitality of our region and the growth (Number & Title) of our customer base is a key value of SMUD. Therefore, SMUD shall exercise strategic leadership and actively participate in regional economic development." Benefits: Provides information on SMUD's overall compliance with Economic Development to the Board of Directors and Executive Team so they can evaluate compliance with specific Board Policy; Provides an opportunity to make recommendations or policy revisions, as necessary. Cost/Budgeted: N/A
Alternatives: Provide the Board with written reports and communication through the CEO & General Manager.
Affected Board of Directors, Executive Team & staff. Parties: Coordination: Economic Development. The report includes updates primarily through key contacts in Customer & Community Services, Grid Assets, Local Govemment Relations, Resource Planning and Pricing, Research and Development; Workforce Development Presenter: Jim Alves, Economic Development Representative
Additional Links: SACRAMENTO MUNICIPAL UTILITY DISTRICT OFFICE MEMORANDUM
TO: Board of Directors DATE: April 11, 2018
FROM: Cliaire Rogers ~;),
SUBJECT: Audit Report No. 28006764 Board Monitoring Report; SD-13: Economic Development
Audit and Quality Services (AQS) reviewed the SD-13 Board Strategic Direction on Economic Development 2017 Annual Monitoring Report. AQS performed the following review steps: • Reviewed the information presented in the monitoring report to determine the possible existence of material misstatements', • Interviewed report contributors and verified the methodology used to prepare the monitoring report; and • VaJidated the reasonableness of a selection of the report's statements and assertions.
During the course of the review, nothing came to the auditor's aftention that would suggest the report did not fairly represent the source data available at the time of the review.
cc ..
Arlen Orchard Board Monitoring Report 2017 SMUD SD-13, Economic Development *
1. Purpose & Background
Strategic Direction 13 (SD-1 3) Economic Development states that,
"Promoting the economic vitality of our region and the growth of our customer base is a key value of SMUD. Therefore, SMUD shall exercise strategic leadership and actively participate in regional economic development.
Specifically: a) SMUD shall promote innovation while maintaining rate affordability and balancing the other strategic directions. b) SMUD shall align its economic development activities with regional economic development initiatives. c) SMUD shall assist in retaining, recruiting and growing commercial and industrial rate-paying customers. d) SMUD shall offer economic development rates and program incentives. e) SMUD shall offer a contracting program for certified small businesses who are rate-paying customers."
2. Executive summary
SMUD is in compliance with SD-13, Economic Development.
SMUD continues to be a nationally recognized leader in corporate citizenship for our long standing commitment to the economic health of the greater Sacramento region. In 2017, we continued our history of visible support for and engagement with the business community, with a focus on playing a greater role in policy discussions and strengthening relationships with local leaders. We developed key partnerships to further a shared vision, delivering greater collective impact.
Our strategy to enhance the economic vitality of the Sacramento region is comprehensive. Key tactics to engage, inform and support the regional business community include:
Supporting business formation, attraction, retention and expansion efforts. Providing business development resources for entrepreneurs. Improving the Supplier Education and Economic Development (SEED) contracting program for local small businesses. Continuing to offer economic development rates. Providing program incentives and rebates.
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 1 of 16 Expanding partnerships with local agencies and non-profits to facilitate community development. Supporting the developer community. Broadening support of the region's emerging innovation ecosystem.
Recognizing that innovation drives productivity in all industry sectors, we continued to engage with the region's emerging innovation ecosystem. Our important partnerships with Hacker Lab and InnoGrove continued, and we reestablished a partnership with CleanStart. We also continued exploring ways in which we could partner with 1/0 Labs and the iHub. In addition to supporting entrepreneurs and startups and local and regional innovation efforts, these partnership also complement SMUD's research and development program and the Innovation Generator partnerships while balancing other Strategic Directions, such as maintaining rate affordability.
Through outreach and education, SMUD's SEED team teaches local small businesses how to contract with SMUD and positively impact their bottom line. In 2017, the SEED program partnered with Supply Chain Services, conducting a variety of outreach and education events and awarding 22.9% of SMUD's contracts to SEED-certified small businesses, exceeding the annual goal of 20%. 195 SEED contracts were awarded in 2017, totaling $58,150,545.
SMUD works with numerous local economic development organizations to enhance regional economic vitality. Our leadership roles in the Greater Sacramento Economic Council, Sacramento Metro Chamber, Sacramento Hispanic Chamber, Sacramento Black Chamber, Valley Vision, Sacramento Asian Pacific Chamber, SacPACand many others help ensure our activities support the region's efforts to attract, retain and expand companies in our service area. It also means SMUD has a seat at the table early on in economic development conversations. Other major tactics to encourage regional economic development include our dedicated Commercial Development team, participation in business walks and hosting international delegations to showcase SMUD and our region.
Business attraction was a key economic development focus in 2017. We participated in 29 new business attraction, retention and expansion projects. Our work resulted in five wins and the creation of an estimated 1, 130 jobs within our service area. Projects included a 320,000 square foot building at McClellan Business Park in which Dome Printing will consolidate and expand operations, a 150,000 square foot facility at McClellan Business Park for a Chinese solar manufacturer (CSUN), and purchase of a building in Rancho Cordova by software development company Redtail Technologies. To cultivate additional projects, SMUD participated in eight business attraction, retention and expansion missions and tradeshows outside of California. Staff engaged with site selection consultants and key attraction prospects at conferences hosted by groups including the International Council of Shopping Centers and the Industrial Asset Management Council.
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 2 of 16 With each new business attraction, retention or expansion proj. ect, SMUD offers an Economic Development Rate (EDR) to qualified companies. In 2017, SMUD added 4 customers to the EDR: Mitsubishi Rayon, CSUN Solar, United States Cold Storage and Mary Ann's Bakery.
SMUD launched the Shine Sponsorship program to support neigh bo rhood -level economic development initiatives across our service area. In its first year, Shine awarded approximately $400,000 to 20 local non-profits. Additional detail is provided in Appendix B.
3) Information about our 2017 efforts to achieve the specific elements outlined in SD-13 is provided in the following section.
a) SMUD shall promote innovation while maintaining rate affordability and balancing the other strategic directions.
SMUD continued partnerships with Hacker Lab and InnoGrove to promote innovation, job creation and the expansion of local startup companies. These partnerships, as well as those facilitated through the Innovation Generator (IG), helped incentivize startup companies to work on solving some of public power's most significant technology imperatives.
The IG program was created to provide opportunities for SMUD to support innovation with minimal risk. IG partnerships give businesses with new ideas and technology an opportunity to partner with SMUD and leverage our resources, expertise, and customer connections to test and refine their technology. In exchange, SMUD gains new revenue streams from successful IG pilots while alleviating pain points and/or improving processes of internal customers and SMUD customers. 2017 marked the final year of the Innovation Generator program, which has now been replaced with our New Business Development group.
SMUD continued to explore a partnership with 1/0 Labs, engaging with their foundation through the Sacramento iHub. We formalized a sponsor relationship with CleanStart as it relaunched a number of activities that had gone dormant following the closure of the Sacramento Regional Technology Alliance (SARTA). Detailed information about our 2017 partnerships that promote innovation is provided in Appendix A.
SMUD continues to effectively balance our goal of fostering innovation with our commitment to keep rates low. SMUD's average rates will remain competitive even after the adopted rate increases in 2018 and 2019. The California Public Utilities Commission (CPUC) authorized PG&E on May 11, 2017 to increase its electric rates 5.33% in 2018 and 4.02% in 2019. In 2017, SMUD's system average rate was 32% below PG&E. A detailed summary of SMUD's rate competitiveness is provided in Appendix A.
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 3 of 16 b) SMUD shall align its economic development activities with regional economic development initiatives
Business aftraction is a key regional priority. SMUD plays a critical role in the Greater Sacramento Economic Council (GSEC) with SMUD's CEO serving on its Executive Commiftee and staff members serving as active members of its Economic Development Director's Task Force, Marketing Commiftee and Young Professionals Council. Through these roles, SMUD provided indirect support in the attraction of five companies that will create 1, 130 jobs in SMUD's service territory. We also supported GSEC's efforts to market the region through a targeted marketing and PR campaign executed by Edelman. Detailed information about SMUD's role in key regional economic development organizations is provided in Appendix B.
SMUD hosted 10 international delegations in 2017, which included 133 visitors from 16 countries. Through these visits, we showcased SMUD and promoted our service area as a destination for foreign direct investments and international trade. These efforts are aligned with the Northern California World Trade Center's Metropolitan Export Plan.
To promote workforce and community development, SMUD continued support for Valley Vision's Urban Jobs Initiative. We also played a critical role in the Oak Park Promise Neighborhood Initiative. SMUD is committed to provide no-cost energy upgrades to improve household stability for qualified low-income residents, valued at $4.6 million over the next five years. SMUD also committed to provide competitive needs-based college scholarships for students pursuing STEM degrees. In May, SMUD launched the Shine community development program to promote neighborhood improvements and encourage community development across our region.
In September, SMUD supported the Sacramento Black Chamber of Commerce and participated in the Congressional Black Caucus Foundation's national conference. Staff participated in a panel discussion on "Sustainability in Underrepresented Communities" and shared the ways in which SMUD is working with a network of community partners to improve neighborhoods and shrink the widening disparity gap in underserved communities. We addressed policy issues related to environmental justice and ways that SMUD is increasing the depth, breadth and reach of its community involvement to enhance economic development.
Staff led the Sacramento Metro Chamber Study Mission to Austin, Texas which provided an opportunity to demonstrate SMUD's leadership role in economic development.
SMUD also played a key role in developing and executing the inaugural Capital Region Executive Leadership Mission to Washington, DC. This new federal lobbying program washosted by Congresswoman Matsui, chaired by City of Sacramento
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 4 of 16 Mayor Steinberg, and organized by the Sacramento Asian Pacific Chamber of Commerce and Region Business.
c) SMUD shall assist in retaining, recruiting and growing commercial and industrial rate-paying customers
In addition to our 29 new attraction, retention and expansion projects, staff cultivated potential projects by conducting and participating in eight missions and tradeshows during 2017.
Staff worked closely with the developers of the Downtown Plaza Tower and Downtown Commons (DoCo), and our Commercial Development team actively engaged with more than 120 commercial, mixed-use and residential project developers through our service territory.
Staff from numerous departments partnered with the Sacramento Metro Chamber and the Capital Region Small Business Development Center (SBDC). To support the attraction and retention of small business, the SBDC helped 41 businesses start up, retained 19 jobs, created 83 jobs and helped businesses access $11.2 million in capital during 2017.
CCS has developed a team for the Cannabis Industries intake process. The team acts as the point of contact and support for all customer inquiries related to Cannabis Operations.
d) SMUD shall offer economic development rates and program incentives
We added four customers to the EDR- Mitsubishi Rayon, CSUN Solar, United States Cold Storage and Mary Ann's Bakery. For additional information on SMUD's EDR, please see Appendix D.
Our small and mid-size business accounts team actively engaged with 613 customers, providing personalized assistance and tailored energy advice and solutions to meet the individual customer needs. . Energy savings of 5.17GVvh and demand savings of 3.61 MW. There were also several Savings by Design and Customized Incentive projects completed with small and mid-size business customers.
e) SMUD shall offer a contracting program for certified small businesses who are rate-paying customers
Our SEED program offers certified small businesses incentives to participate in SMUD's competitive bid process. It also helps prime contractors find local sub- contractors to gain an advantage in developing their bids or proposals.
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 5 of 16 Our Small Business Outreach and Engagement (SBOE) team held 14 workshops, orientations or panel discussions and coordinated participation in over 150 outreach events, reaching approximately 15,000 people with information about SEED.
SMUD's annual goal is to award 20% of all contracts to certified small businesses. We exceeded that goal in 2017, awarding 22.9% of contracts to SEED qualified vendors, totaling $58,150,544.78.
The SBOE team also coordinated the Business Advisory Council (BAC). The BAC raises local business awareness about contracting with SMUD and makes recommendations for improvements to our contracting process. BAC has two ad-hoc commiftees and their primary function is to address critical procurement mafters affecting our local business community and SMUD's Supply Chain department.
For more information about our 2017 efforts to promote our SEED program and achievement of our SEED goals, please see Appendix E.
4) Challenges: The regulatory climate in California, particularly the costs of doing business and regulatory compliance, are often cited as reasons why companies choose to locate in other states.
In 2017 Forbes Magazine ranked California 31st out of 50 states in its "Best States to do Business" report. While the state received relatively high marks for Economic Climate and Growth Prospects, it ranked 44th for Business Costs.
SMUD is actively working with regional and state partners, such as the Greater Sacramento Economic Council, GO-Biz and the California Association of Local Economic Development, to address the state and local regulatory challenges that limit our ability to attract new businesses.
5) Recommendation: It is recommended that the Board accept the Monitoring Report for SD-1 3, Economic Development.
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 6 of 16 APPENDIX A
SMUD shall promote innovation while maintaining rate affordability and balancing the other strategic directions.
In a healthy innovation ecosystem, resources invested in the knowledge economy through private, government, or direct business investment are subsequently replenished by innovation induced profit increases in the commercial economy. SMUD's approach to innovation includes investments in the knowledge economy that compliment business development efforts.
We support the full complement of Hacker Lab's entrepreneurial and maker education programs, as well as its business accelerator (Startup Hustle) through our continuing partnership. In 2017, Hacker Lab launched Innovator, a publication devoted to covering the Sacramento region's startups and makers.
Hacker Lab supported 286 new companies in our region during 2017, in industries including information & communication technology, health, food & agriculture and advanced manufacturing.
Hacker Lab trained more than 1,300 people in diverse course offerings including 3D printing, business entrepreneurship, robotics, and, electronics.
Our partnership with InnoGrove supported a STEM-related summer camp and other programs throughout the school year. InnoGrove hired a new employee in 2017 who is running many of the summer camp activities. InnoGrove's programs use PodPi, a comic book and story-based platform for kids (ages 8 tol 5) to learn the basics of electronics, robotics, and programming. The story takes kids on a journey to understand how complicated systems work and along the way, they program a computer chip mounted on a board with some hardware, such as lights or motors. 30 students participated in the summer camp In 2017.
InnoGrove also started working with Innovation Playground, a new group in Elk Grove formed by two elementary school teachers who recently moved from San Francisco. They are hoping to continue this program and get into drone education in 2018. Throughout the school year, a total of 60 students participated in Innovation Playground activities.
We added five new partnerships to our Innovation Generator portfolio, in addition to nine existing projects. A pilot with Simple Energy established SMUD Energy Store, an e-commerce site for vetted energy and smart home products. We also partnered with Clean Power Research (CPR) to develop a DER planning tool software. The full build- out is expected to take approximately two years. A pilot with GridX is underway to implement a Billing Scenario Tool for customer service representatives to help customers understand various bill impacts (e.g. rates changes, EV purchase, etc.). We
GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 7 of 16 added on to the First Advisor services that FirstFuel already provides by developing additional modules to help our Strategic Account Advisors recommend products and programs to customers. Finally, we entered into a multi-year partnership with NEC and STI to jointly develop products and services for the recently deregulated Japanese electricity market.
2017 continued to be a year of transition for 1/0 Labs. While continuing to advance its plans for physical space, 1/0 Labs assumed management responsibilities for the Sacramento iHub — one of ten in California. The statewide network of iHubs is overseen by the Governor's Office of Business and Economic Development (GO-Biz).
Continuing our prior partnership with CleanStart as a program of the former Sacramento Regional Technology Alliance (SARTA), SMUD served as a sponsor of CleanStart, supporting the relaunch of programs such as their entrepreneur training classes and publication of the annual progress report for the region's Clean Tech industry.
Commitment to Low Rates: SMUD continues to maintain rates that are below PG&E's, both at a system level and by rate class.
Figure I compares SMUD and PG&E system average rates for the past 20 years. On a system average basis, SMUD's system average rates have averaged 23.6% below PG&E's since 1998. SMUD's average rates will remain competitive even after the adopted rate increases in 2018 and 2019.
System Average Rate 200
18~
160
140
120 At 100
80
60
40
20
00 N~ N Figure 1 — SMUD and PG&E Historical System Average Rate Compar'ison GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 8 of 16 Figure 2 - SMUD and PG&E Rate Comparison in $/kWh Customer Rate Categories Average Annual Rate* Difference Difference Class Description PG&E SMUD PG&E SMUD Below PG&E* Below PG&E* 2017 2017 2017 -- --2016 -- 1 Standard El RSG/E/C/H $0.2307 $0.1487 -35.6% Residental -33.5% Low Income CARE** EAPR & EAPRMED $0.1366 $0.0951 -30.4% -27.0% All Residential $0,2040 $0.1385 -32.1% -30.6% -20 kW A-1 GSN/GSN-T $0.2302 $0.1464 -36.4% -35.2% Small Colmmercial- 21 - 299 kW A-6 GSS/GSS-T $U216 $0.1360 -38.6% -38.5% Medium 300 - 499 kW A-10 TOU-3 SO.2035 $0.1278 -37.2% -35.8% Commercial- 500 - 999 kW E-19 TOU-2 $0.1779 $0.1198 -32.6% -30.4% Large Gornmercial' => 1 mw E-20 TOU-1 $0.1420 $0.1023 -28.0% -23.5% Traffic Signals TC-1 TS $0,2202 SO.1194 -45.8% -45.4% Lighbng Street Lighfing various SLS,NLGT $0.2197 $0.1286 -41.5% -42.6% Agriculture Ag & Pumping AG ASN/D,AON/D $0~ 1782 $& 1322 -25.8% -25.3% System Average $0.1909 $0.1299 -32.0% -30.0% Projected 2017 average prices for SMUD with rates effective 01-01-17. PG&E average prices in 2017 reflect rates effective 3-01-17, perAdvice Letter 5011-E-A. The rate difference in year 2016 reflects SMUD rates effective 01-01-16 and PG&E average rates as of 08-01-16, per Advice Letter 4867-E dated 7-22-16. CARE vs. EAPR includes EAPR & EAPRMED customers. Commercial rates include WAPA credits. The revenue forecast does not consider economic development discounts for year 2017. The rate competitiveness by class is at least 25.8% below comparable PG&E class average rates. Since the creation of this annual monitoring report in 2007, SMUD has maintained rates that were more than 18% below PG&E's. GM 18-076 Board Monitoring Report - SD 13 Economic Development Page 9 of 16 SMUD shall align its economic development activities with regional economic development initiatives. Throughout 2017, SMUD staff held visible leadership roles in regional economic development initiatives and organizations, helping ensure regional stakeholders are working in concert on business development, aftraction, retention and expansion efforts and that our efforts are aligned with regional priorities. SMUD's leadership roles in regional economic development organizations include: • Align Capital Region, Board • Business Environmental Resource Center, Advisory Committee • California Capital, Loan Advisory Committee • Carmichael Chamber of Commerce, Board • Capital Region Small Business Development Center, Advisory Board • Downtown Sacramento Partnership, Board • Folsom Tourism and Economic Development Corporation, Board • Greater Sacramento Economic Council, Board • Greater Sacramento Economic Council, Economic Development Directors Taskforce (EDDT), Chair • Greater Sacramento Economic Council, Marketing & PR Committee • Greater Sacramento Economic Council, Young Professional Council • Greater Sacramento Urban League, Board • Grow Sacramento Fund, Loan Advisory Committee • Hacker Lab, Board • InnoGrove, Board • North Sacramento Chamber of Commerce, Board • Power Inn Alliance, Board • Sacramento Asian Chamber of Commerce, Executive Committee • Sacramento Asian Pacific Chamber of Commerce, Internal Study Mission • Sacramento Black Chamber of Commerce, Board • Sacramento Employement and Training Agency, Board • Sacramento Hispanic Chamber of Commerce, Executive Committee • Sacramento Metro Chamber of Commerce, Executive Committee • Sacramento Metro Chamber, Study Mission Chair • Sacramento Metro Chamber, Cap-to-Cap Economic Development Team & Chair • Sacramento Metro Chamber, State Legislative Summit Economic Development Team • Valley Vision, Executive Committee GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 10 of 16 Shine community development awards program: In 2017, SMUD launched the Shine community development awards program to support neigh borhood-level initiatives across our region. Under this program, funds are awarded to local nonprofite through a competitive application. In its first year, Shine awarded approximately $400, 000 to 20 nonprofits selected from a pool of over 100 applicants. The table below details our 2017 Shine recipients. Wind Youth Services $100,000 Facility improvements to support homeless youth Sacramento Native American $39,490 Facility improvements and energy Health Center, Inc. efficiency upgrades Health Education Council $30,000 Park improvement projects Square Root Academy $30,750 Expansion of STEM education program Development of free after-school youth Fairytale Town $25,000 proqram Sierra Nevada Journeys $24,958 STEM and outdoor science program Crocker Art Museum $20,000 Arts engagement initiative My Sister's House $20,000 Facility improvements Sacramento Parks Foundation $12,500 Park improvement projects California FFA Foundation $11,500 Career pathways video development NeighborWorks Sacramento $10,000 Neighborhood improvement Facility improvements with STEM $10,000 Del Paso Boulevard Partnership component Greater Broadway Partnership $10,000 Neighborhood cleanup initiative Facility improvements and neighborhood $10,000 Stockton Boulevard Partnership cleanup Community garden and educational Common Ground Community $10,000 Development Corporation initiative Rosemont Community Foundation $10,000 Neighborhood cleanup initiative Habitat restoration and educational Center for Land-Based Learning $9,384 . proj ct Sunrise Little League $6,067 Park and sports field improvement William Land Elementary $4,927 Facility improvement Watt Avenue Partnership $4,910 Lighting improvements GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 11 of 16 APPENDIX C SMUD shall assist in retaining, recruiting and growing commercial and industrial rate-paying customers. Projects announced in 2017 include.- Dome Printing — The company was considering locations outside of SMUD's service area to consolidate and expand its operations, but ultimately selected a 320,000-square foot building at McClellan Park. The new state-of-the-art printing facility will use up to 1 OMW of electricity and create 250 jobs at full build out. CSUN Solar — A Chinese solar manufacturer selected McClellan Business Park for a 150,000-square foot facility. The company is taking advantage of the EDR. 200 jobs were created and the facility will use 2.1 MW of electricity. Mary Ann's Bakery —The company was considering moving its Sacramento location to Reno. Mary Ann's is taking advantage of our EDR. 220 jobs were retained in Sacramento. Inductive Automation — The fast growing software development company was considering multiple locations outside of SMUD's service area and ultimately purchased a building in Folsom to accommodate its expansion. 100 jobs were retained and they will create 200 more for a total of 300 jobs. Redtail Technologies — The software development company purchased a building in Rancho Cordova, and is doubling in size from its current Gold River site. The company considered Roseville and El Dorado Hills. The company will grow to 160 jobs. Below is a list of the strategic business attraction and expansion missions and tradeshows that staff supported and/or attended in 2017, targeting industries of regional importance to the Sacramento economy and our local partners. International Council of March 7-9 Monterey, CA Shopping Centers Northern California Industrial Asset April 8-12 Tampa, FL Management Council Team CA — Meet the April 26-28 Ontario, CA Consultants CA Association for Local March 21-23 San Diego, CA Economic Development International Council of May 21-24 Las Vegas, NV Shopping Centers GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 12 of 16 Site Selector Guild Sept. 25-27 Seattle, WA Industrial Asset Oct. 6-11 Richmond, VA Management Council Cloud Expo Oct. 31- Nov. 2 Santa Clara, CA Business Walks: The Sacramento Metro Chamber conducted two significant Business Walks in 2017, including the annual Arden Arcade district on Oct. 20 when 103 businesses were interviewed. The second took place on Broadway for the first time in over 8 years, visiting 65 businesses. SMUD's small and mid-sized bus'iness team also participated in the Citrus Heights Business Walk on Sept. 27, which was organized by the Citrus Heights Chamber of Commerce and visited approximately 160 businesses. Commercial Development: Our Commercial Development team actively engaged with more than 120 commercial, mixed-use and residential project developers throughout our service territory. During its first two years, our Commercial Development team~ • Completed the Developer Assessment Plan. • Refined the "working list" of 160+ commercial, mixed-use and residential project developers, who are now developing or constructing projects throughout SMUD's service territory. • Actively engaged 75% of these developers, assisting in everything from SMUD design and construction services, to energy efficiency improvements and renewable energy resources, to rates and billing inquiries. • Implemented the "developer" dashboard"used by SMUD executives, directors and managers to track all development projects in our service territory. • Issued the first-ever "Developer Satisfaction Survey." With a survey response rate of nearly 20%, developers collectively rated the Commercial Development team's efforts at 9.85 on a scale of 1 to 10 (10 being considered "best in class"). • Coordinated the revision of Board Strategic SD-14, and implemented revised policy to internal SMUDstakeholders, as well as to external developer stakeholders. • Implemented the "Developer Connections" quarterly e-newsletter. The open and read rate is consistently at 50% or more. In addition, the Commercial Development team worked closely with the developers of the Downtown Plaza Tower and Downtown Commons (DoCo), as well as other developers on numerous mixed-use, commercial and residential subdivision projects, including Ice Blocks, MLS stadium, 1430Q, 19J, The Yamanee, Fort Sutter Hotel, B Street Theater (The Sofia), California Fruit Building, Old Sacramento Renovation Project, Sacramento Convention Center, Greenbriar, The Panhandle Project, California Military Headquarters, Department of General Services "0 Street" and "P Street" office towers, Twin Rivers (which elected to go all-electric), and 19Q & The Press Building. GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 13 of 16 APPENDIX D SMUD shall offer economic development rates and program incentives. SMUD offered economic incentives to help aftract new businesses and expand existing ones to grow the regional economy. Incentives ranged from helping design new construction, offering energy-efficient upgrades for equipment and proposing our economic development rate. At the start of 2015, SMUD updated its EDR for potential customers or existing customers with a 299 or more kW load, who create or retain 25 full-time jobs in high unemployment areas or 50 jobs in the rest of our service territory. The company must also be in a specified North American Industry Classification System (NAICS) code. Customers that met this criteria receive a discount of five percent the first year, three percent the second year, and one percent the third year, based on a five-year full- service contract. SMUD offers several energy efficiency incentives to help meet the financial responsibility goals and growing sustainability needs of our commercial customers. Our Savings by Design, Complete Energy Solutions, and Express Energy Solutions programs offer incentives to help customers finance and install new energy-saving equipment and make energy efficiency modifications to their building. We also offer assistance with energy management and incentives for load shifting and curtailment. Our small- and mid-size business team fulfilled 306 Express Energy Solutions customer projects with combined energy savings of 5.17 GWh and demand savings of 3.61 MW. There were also several Savings by Design and customized incentive customer projects completed with small and mid-size business customers. To increase visibility and raise awareness of SMUD's contributions to the regional economy, we launched the 70 Years Bright" integrated marketing campaign. This included promoting our efforts to support businesess throughout the entire lifecycle — from small business contracting opportunities and startup support to the aftraction and retention of Fortune 500 companies through website content, a promotional video and ads to showcase SMUD's impact. This campaign aligned with others, such as the SMUD Means Business Campaing, which highlighted successful partnerships with businesses to highlight ways in which commercial customers can save through SMUD. SMUD means SMUD means business. .A&L b~in ld NL m *$muff Osmuv GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 14 of 16 APPENDIX E SMUD shall offer a contracting program for certified small businesses who are rate-paying customers. In 2017 we achieved our goal of awarding at least 20 percent of all contracts to certified small businesses. Specifically, we awarded 195 SEED contracts totaling over $58 million. 2017 Award Type Total PO $ PO Count Program % SEED Prime $ 28,186,345.54 74 48% SEED Sub $ 28,153,775.76 0 48% Sheltered Market $ 892,902.00 12 2% Exempt (<$20,500) $917,521.48 109 2% Grand Total $58,150,544.78 195 100% Note.- The acronym PO refers to "Purchase Orders." The SEED team focused its efforts on the following key outreach initiatives: Sacramento Public Agency Consortium (SacPAC) — During 2017, SMUD was chosen to chair SacPAC, a collaborative effort of public agencies and small business assistance organizations in the Sacramento region. Members include the State of California, County of Sacramento, CalTrans, Regional Transit, Small Business Association, SCORE, Sacramento Small Business Development Center, Hillsdale Business Information Center, Metro Chamber, Sacramento Asian Chamber of Commerce, Procurement Technical Assistance Center, Sacramento Black Chamber of Commerce and the Sacramento Hispanic Chamber of Commerce. "Meet the Primes" Events / HQ Rehabilitation Project — SMUD coordinated a Meet the Primes event in support of the Headquarters Rehabilitation Project. The event was designed to facilitate SEED sub-contracting participation. SEED staff coordinated the event for the prime contractor and Tier 1 subcontractors to connect with SEED sub-contractors. This effort resulted in approximately 28% SEED sub-contracting, representing $18M of the total contracts awarded. "Meet the Buyers" Conference — SMUD staff partnered with SacPac members to host the 6 th annual "Meet the Buyers" conference. The event is a forum for GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 15 of 16 small local contractors to meet SMUD buyers and learn about contract'ing opportunities. 144 businesses attended and were able to meet one-on-one with the buyers, as well as register on-site in SMUD's EBSS and update their profile. New industry specific workshops were incorporated to enhance and add extra value to the event. Connecting Point conference — SMUD, in conjunction with SacPAC, coordinated the Connecting Point conference during Capitol Region Small Business Week. More than 300 people representing local businesses attended the conference. The expo featured over 65 public and private sector exhibitors seeking small businesses to contract with and included a "Cyber Caf6," allowing vendors to register on the spot in SMUD's EBSS. Staff partnered with many of the exhibitors to provide workshops and panel discussions designed to remove barriers to contracting. Capital Region Small Business Week — We supported, coordinated, exhibited and participated in all activities throughout the Capitol Region Small Business Week. SMUD was the "Powered by" sponsor for this regional event and the 70 Years Bright campaign was featured and highlighted with visibility throughout the week's activities. How to Do Business with SMUD: Pilot Industry Specific Workshops — We piloted a new workshop format to engage new business vendors. SBOE staff collaborated with Supply Chain to deliver four industry-specific pilot workshops to help address some common barriers to participation by sector. The workshops featured industry-specific content tied to our top four procurement categories, allowing attendees to ask very targeted questions related to their work. This format improved understanding of SMUD's procurement program and increased the likelihood of future participation. Sheltered Market Catering Contract — SEED and Supply Chain coordinated a Sheltered Market Master Service Agreement opportunity, awarding nine contracts to SEED qualified caterers. New Partners — SMUD expanded external outreach efforts by creating two new MOU partnership agreements -- with the Capital Asian American Professional Society and the National Association of VVomen Business Owners. GM 18-076 Board Monitoring Report — SD 13 Economic Development Page 16 of 16 SSS No. GP18-003 Committee Meeting & Date BOARD AGENDA ITEM Policy Committee; STAFFING SUMMARY SHEET 4/18/18 Board Meeting Date 4/19/18 TO TO 1. Claire Rogers 6. 2. Paul Lau 7. 3. Nicole Howard 8. 4. Jennifer Davidson 9. Legal 5. 10. CEO & General Manager No If no, Consent schedule a No (If no, explain in CostIBudgeted Yes Budgeted Yes Calendar dry run section.) presenlation. MAIL DATE DEPARTMENT EXT. FROM (IPR) STOP SENT Maria Veloso Koenig Grid Planning EA403 5794 3/29/18 NARRATIVE: Requested a. Accept the monitoring report for Strategic Direction SD-14, System Enhancement. Action: b. Discuss, with possible amendment, Strategic Direction SD-14, System Enhancement. Summary: The purpose is to provide the Board with the annual update on SD-14, System Enhancement, for the year 2017. The information in the monitoring report could be used by the Board to detertnine if the policy needs to be revised or further developed. If so, those items could be scheduled for subsequent meetings. Board Policy: SD-14, System Enhancement. (Number & Title) Benerits: Allows the Board of Directors a better understanding of Board Policies and gives them an opportunity to make revisions if necessary. Cost/Budgeted: Cost funded from the contingency budget, as no projects were identified at the time of budget approval. Actual spending was $1 million. Alternatives: Provide the Board written reports and communications through the General Manager & CEO. Affected N/A Parties: Coordination: Grid Assets; Local Govemment Affairs Presenter: Maria Veloso Koenig; Director, Grid Planning Additional Links: SUBJECT ITEM NO. (FOR SD-14 System Enhancement Monitoring Report I LEGALUSEONLY9 SACRAMENTO MUNICIPAL UTILITY DISTRICT OFFICE MEMORANDUM TO: Board of Directors DATE: April 10, 2018 FROM: Claire Rogers SUBJECT: Audit Report No. 28006765 Board Monitoring Report; SD-14 - System Enhancement Audit and Quality Services (AQS) reviewed the SD-14 Board Strategic Direction on System Enhancement 2017 Annual Monitoring Report. AQS performed the following review steps.- • Reviewed the information presented in the monitoring report to determine the possible existence of material misstatements; • Interviewed report contributors and verified the methodology used to prepare the monitoring report,- and • Validated the reasonableness of a selection of the report's statements and assertions. During the course of the review, nothing came to the auditor's attention that would suggest the report did not fairly represent the source data available at the time of the review. cc. Arlen Orchard Board Monitoring Report 2017 SD-14, System Enhancement Policy # SMUD 1. Background Strategic Direction 14, the System Enhancement policy states that: As a community-owned utility, SMUD recognizes that the relocation or underground placement of primary voltage power lines may be desirable to local J'urisdictions to improve aesthetics, economic vitality, safety and disabled access. Therefore, it is a key value of SMUD to make selected distribution system enhancements, such as permanent relocation or underground placement of primary power lines below 69 kV. a) SMUD will, at its expense and where technically feasible, permanently relocate or underground existing overhead distribution facilities provided the governing body of the city or county in which the electric facilities are and will be located has: i) Identified, after consultation with SMUD, a specific system enhancement project,- ii) Determined the project is in the public interest,- iii) Ensured all existing overhead communication facilities related to the project will also be permanently relocated or placed underground,- iv) Obtained and provided SMUD with all easements necessary for the project. b) After achievement of core financial targets, SMUD will annually commit up to one-half of one percent of its annual gross electric sales revenue to system enhancements. The proposed projects will be subject to SMUD's annual budget approval process, and uncommifted funds from any given year will not be carried over to future years. Funding will be assigned to projects brought forward by local cities or counties based on applying the following criteria (not in order of preference): i) Project scale and/or cost when measured against available District resources. ii) Requesting entity has developed full scope, obtained all necessary easements, and development plan for customer service conversion from overhead to underground, as required. iii) Extent to which the costs are borne by others. GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 1 of 8 2. Executive summary SD-14 supports our North Star objective of Value Our Customers and Community by partnering with local agencies on their projects to improve aesthetics, economic vitality, safety and disabled access through the relocation or underground placement of existing power lines below 69kV. SMUD has approximately 3,300 miles of overhead distribution lines (excluding 69kV), Approximately 4% (145 miles) of the distribution lines parallel commercial corridors and are likely candidates for System Enhancement proj'ects. In 2008, the Board modified the policy to create more opportunities for System Enhancement projects rather than restricting them to just commercial corridors. The revised policy also included language to clarify that all communications facilities within the boundaries of the System Enhancement project must also be relocated or placed underground. In addition, the revised policy included the requirement that System Enhancement project funding must be approved through the annual budget process and uncommitted funds could not be carried into future years. In 2017, the Board revised the policy to clarify that it applies to the permanent relocation or underground placement of existing overhead distribution facilities. SMUD is in compliance with the policy. The policy states that SMUD "will annually commit up to one-half of one percent of its annual gross electric sales revenue to system enhancements." For 2017, this threshold was approximately $6.8 million. There were no specific projects identified when the 2017 budget was developed. However, the County's Hazel Avenue Phase 2 project encountered delays and resulted in the construction of SMUD's underground facilities to carry over into 2017. In addition, a reimbursement was issued to the Ice Blocks project for the relocation of SMUD's existing facilities. The actual spending on these two projects in 2017 was $1 million and funded from the contingency budget. The table below summarizes the spending by project. GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 2 of 8 Total Total 2017 2017 Local Project Title Projec Project Project Projec Agency t Spend Budciet t Hazel Avenue Phase 2 Sacramento Curragh Downs to Sunset $2.1 M County $2.3M $0 $0.81VI Avenue (1 mmle) City of Ice Blocks Project $0.31VI $0.47M $0 $0.21VI Sacramento (0.2 miles) Grand Total: $2.4M $2.77M $0 $1.0m Since 2017, there have been increased awareness and interest from the commercial development community regarding the SD-14 policy. As a result, SMUD staff initiated another round of education effort and reached out to City and County staff as well as their elected officials to describe the process for private development projects. SMUD Commercial Development staff will also be launching a proactive education and outreach effort to inform the nearly 160 identified developers in our service territory regarding the policy and the process for SD-14 funding considerat'ion. GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 3 of 8 Additional supporting information: Since the adoption of the SD-14 policy in late 2005, eight projects have been funded through the policy for a total of $10.5 million. The following table lists the projects completed by year. SMUD SMUD Local Construction Project Cost Agency Project Description Comi3letion North Highlands Town Ctr. Sacramento at Watt Ave. & Freedom Park Dr. 2012 $1.1m County (0.5 mile) City of 7th St. Sacramento between North B & Richards Blvd. 2012 $1.31VI (1,500 ft.) City of Richards Blvd. Sacramento th between North 5 & North 7th 2012 $1.2M Streets 1,000 ft.) Auburn Blvd. Citrus Heights between Sylvan Corners & Rusch 2013 $2.6M Park City of 16th and 0 Streets 2013 $0.31VI Sacramento (1,000 ft.) Fair Oaks Blvd. Sacramento between Landis Ave. & Engle Rd. County 2016 $1.2M (0.5 mile) Hazel Avenue Phase 2 between Sacramento Curragh Downs & Sunset Ave. $2.31VI County 2017 (11 mile) Ice Blocks Project City of R Street between 16th & 18th Streets 2017 $0.47M Sacramento (1,000 ft.) Grand Total: $10.5M GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 4 of 8 Other projects currently being considered under SD-14 are as follows: SMUD LocalAgency Proposed Project Description Construction Ballpark .Rt.qrt ;ktp Estimate Auburn Blvd. Citrus Heights 2019 $2.OM between Rusch Park & 1-80 (0 75 molp) Fair Oaks Blvd Sacramento between Landis Ave. & Angelina Ave. Late 2018 County $720K (n i miies~ Hazel Avenue Phase 3 between Sunset Sacramento 2019 $1.7M Ave & Madison Ave. County (0.7 mile) Sutter Village City of TBD TBD F and 51 st Street Sacramento (- 200 ft.) SMUD and local agency staff are collaborating in regard to the detailed requirements of the above proposed projects. 3.Recommendation: It is recommended that the Board accept the Monitoring Report for SD-14 System Enhancement Policy. 4. Appendices: Attached are photographs of three areas before and after project construction. GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 5 of 8 Sacramento County - Fair Oaks Boulevard Project before construction Sacramento County - Fair Oaks Boulevard Project after construction GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 6 of 8 Sacramento County - Fair Oaks Boulevard Project before construction .7 Sacramento County - Fair Oaks Boulevard Project after construction GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 7 of 8 City of Sacramento - Ice Blocks Project before construction City of Sacramento - Ice Blocks Project after construction GM 18-051 Board Monitoring Report 2017 SD-14 — System Enhancement Policy Page 8 of 8 SSS No. Committee Meeting & Date BOARD AGENDA ITEM POLICY — April 18, STAFFING SUMMARY SHEET 2018 BOD 2018-09 Board Meeting Date N/A X TO TO 1 Jennifer Davidson 6. 2. Paul Lau 7. 3. Nicole Howard 8. 4. 9. Legal 5. 10. CEO & General Manager No Ifno, Consent schedule a dry No (If no, explain in CostIBudgeted Yes x Budgeted Yes Calendar run section.) sentation.0 MAIL DATE FROM (IPR) EPARTMENT EXT. STOP SENT Gregg Fishinan Donna Lofton LBard Office A310 5079 4/4/18 NARRATIVE: Requested Allow the Board members and executive staff an opportunity to discuss and evaluate BL-1 Board-CEO and Action: General Manager Relationship, BL-2 Board-Chief Legal Officer and General Counsel, BL-3 Board-Internal Auditor, and BL-4 Board-Special Assistant as part of the Board policy monitoring process. Summary: The Board agreed to monitor established policies on a yearly basis to create a framework to better understand the policies and give the Board an opportunity to make improvements, additions or changes as desired. Board Policy: This monitoring supports GP-2 Governance Focus which states that the Board will direct, evaluate, and inspire (Number & Title) the organization through the establishment of written policies which reflect the Board's values. Benet-its: Monitoring these policies allows the Board members an opportunity to update the policies as needed. Cost/Budgeted: N/A Alternatives: Monitor these policies at a later date. Affected Board of Directors Parties: Coordination: Donna Lofton, Special Assistant to the Board Presenter: Bill Slaton, Policy Chair Additional Links: SUBJECT Rlock Monwtorq no of BL-1 BL-2 BL-3 BL-4 Em, ww",~Nl 2 SSS No. SSS No. 2018 - 4 Committee Meeting & Date BOARD AGENDA ITEM Policy STAFFING SUMMARY SHEET April 18, 2018 Board Meeting Date April 19, 2018 TO TO 1 Paul Lau 6. 2. Jennifer Davidson 7. 3. Nicole Howard 8. 4. 9. Legal 5. 10. CEO & General Manager No Ifno, Consent schedule a drj, No (Ifno. explain in CostIBudgeted Yes Budgeted x Yes Calendar run section) MAIL DATE FROM (IPR) Fsental'on UPAR ENT EXT. STOP SENT ME- Claire Rogers ArdTandm t Quality Services 7122 1/18/18 1 2 NARRATIVE: Requested Approve revisions to Board-Staff Linkage BL-3, Board-Internal Auditor Relationship Action: Summary: The California Government Code (section 1236) requires SMUD to conduct audits using either the standards required by the Institute of Internal Auditors or the Government Auditing Standards. SMUD had chosen to adopt the IIA standards. The Institute of Internal Auditors (IIA) provides guidance to Internal Audit departments in developing their charter. For SMUD's internal audit department the BL-3 acts as our charter and provides our purpose, authority and responsibility. The requested changes align with the IIA standards and document the following: • Definition of Internal Auditing • Internal Audit Mission • Internal Audit Governance • Independence • Quality assurance and Improvement Board Policy: Board-Staff Linkage, Board-Internal Auditor Relationship (BL-3) (Number& Title) Benerits: Enhanced documentation of Intemal Audit's role Cost/Budgeted: n/a Alternatives: Not adopt the changes and leave language as is Affected Board, Intemal Auditor Parties: Coordination: n/a Presenter: Claire Rogers Additional Links SMUD BOARD POLICY Category: Board-Staff Linkage Title: Board-internal Auditor Relationship Policy Number: BL-3 Date of Adoption: December 19, 2002 Resolution No. 02-12-14 Revision Date: October 16, 2003 Resolution No. 03-10-14 Revision Date: April 20, 2006 Resolution No. 06-04-10 Revision Date: December 18, 2008 Resolution No. 08-12-10 Revision Date: November 1, 2012 Resolution No. 12-11-08 Revision Date: August 20, 2015 Resolution No. 15-08-02 Revision Date: April 19, 2018 Resolution No. 18-04- The Internal Auditor provides independent, objective assurance and consulting services to the Board and management designed to add value and improve the eFgaR4atiGR'6SMUD's operations. The Internal Auditor's mission is to enhance and i)rotect oraanizational value bv orovidina risk-based and obiective assurance, advice and insight. The Internal Auditor will aovern the internal audit der)artment bv adherinq to the mandatory elements of The Institute of Internal Auditors' International Professional Practices Framework, including the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the International Standards for the Professional Practice of Internal Auditing, and the Definition of Internal Auditing. The Internal Auditor reports functionally to the Board and to the Chief Executive Officer and General Manager for all administrative matters. The Board may provide input into the audit planning process and may require that special projects and reviews be conducted. The Chief Executive Officer and General Manager is responsible for hiring and terminating the Internal Auditor with the concurrence of the Board. As part of the hiring process, the Chief Executive Officer and General Manager will recommend two qualified final candidates to the Board for its consideration. The Chief Executive Officer and General Manager may rank the candidates in order of preference. The Chief Executive Officer and General Manager is responsible for the evaluation of the Internal Auditor's performance. The Board, at its discretion, may participate in the Internal Auditor's performance evaluation. The Internal Auditor will assure that the internal audit department remains free from all conditions that threaten the ability of the auditors to carry out their responsibilities in an unbiased manner~ including matters of audit selection, scope, Procedures, frequency, timing, and report content. The Internal Auditor shall conduct audit servicesrevqews as identified in the annual audit plan, investigations, and special projects requested by management, Chief Legal Officer and General Counsel, or the Board. The work of the Internal aAuditor shall provide reasonable assurance regarding the achievement of objectives 1'n the following areas: a) Adherence to plans, policies and procedures. b) Compliance with applicable laws and regulations. C) Effectiveness and application of administrative and financial controls. d) Effectiveness and efficiency of operations. e) Reliability of data. f) Safeguarding assets. g) Accuracy of the Strategic Direction monitoring reports. The Internal Auditor in the performance of his or her duties shall have unlimited access to all activities, records, property and personnel of SMUD-including the Board of Directors. The Internal Auditor will maintain a quality assurance and improvement program tha covers all aspects of the internal audit department. The Board shall receive the results of all audits it requests and all results from the annual audit plan. Audit reports from the annual audit plan will be placed on a Board committee agenda for discussion as an information item. In addition, the Internal Auditor shall inform the Board of the results of any other audit when he or she reasonably determines that the audit indicates a significant financial, operational, or reputational risk to SMUD. In all cases, reports will be sent to individuals, be it the Board or management, who are in positions to see that action is taken on audit findings and recommendations. Monitoring Method: Board Report Frequency: Annual SSS No. Committee Meeting & BOARD AGENDA ITEM Date STAFFING SUMMARY SHEET POLICY 2018 BOD 2018-08 Board Meeting Date N/A TO TO 1 Nicole Howard 6. 2. Paul Lau 7. 3. Jennifer Davidson 8. 4. 9. Legal 5. 10. CEO & General Manager No If no. No (Ifno, explain in Consent Yes x schedule a dry Budgeted Yes CosilBudgeted Calendar run presentation. section) MAIL DATE FROM (IPR) DEPARTMENT EXT. STOP SENT 3-6- Gregg Fishman Donna Lofton Board Office A310 5079 18 NARRATIVE: Requested Enable the Board of Directors and Executive Staff an opportunity to review the Board Work Plan. Action: Summary: The Board President reviews the Board Work Plan at the Policy Committee meeting to ensure agenda items support the work of the Board. Board Policy: This review of the work plan supports GP-6 Role of the Board President which states that the Board President (Number & Title) shall give progress reports on the Board's work plan. Benefits: Reviewing the Work Plan allows the Board members and Executive staff to make changes to the Work Plan and Parking Lot items as necessary. Cost/Budgeted: N/A Alternatives: Not review the Work Plan at this time Affected Board and Executive staff Parties: Coordination: Donna Lofton Presenter: Gregg Fishman, Board President Additional Links: SUBJECT Board Work Plan 4 1 —10001544= — rA Lei