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04-13-2010 ERMU MINELK Rli~C12 MIIINIC1PAl. UT11..1TliCS liEG111,A1i 1VlE~TING ©r TFIE I1TdL1T1E5 C®1VI1V11561®N Ii~LD AT 11TdLITYES C6NPE~NCiC R®®NI April 13, 2010 Members Present: Jolm Dietz, President; Jerry Gumphrey, Vice Chair; Daryl Thompson, Trustee EI2MU StaffPresent: "frog Adams, Direotor of Operations; Theresa Slominski, Finance DixectodOffice Manager; Mark Fuchs, Line Superintendent; David Berg, water Superintendent; Wade Lovelette, Technical Services Superintendent; Judy McSpadden, Recording CLerl~ Richard Wagner, Peter Nielsen City Staff Present; Lori Johnson, City Administrator; Tim Simon, Finance Director Others Present: Mark Mathison, Attorney from Gxay Plant Mooty Law Firm; Andrew Berg, Auditor for Abdo, Eick & Meyers 1.1 Call meeting to ordor Apri113i20f0 John Dietz called the April 13, 2010 meeting to order at 4:00 p.m. 2.1 ConsidorlTtilitiesAeenda Troy Adams requested 4.0 be added to the agenda titled Resolution for Refimding. John Dietz added two items to discuss under Other Business. Daryl Thompson moved to approve the April 13, 2010 amonded UtilDtios Agonda. Jerry Gumphrey seconded the motion. lbdotion carried 3-0. 3.1 Consider Consent Agenda John Dielz had questions on the check register and financials, shrff responded. .Derry Gumphrey moved to approve the Consent Agenda as follows: a. tVlarchChcclcliegistcr b. March 9,2010 Nlinu¢es c. Financial licports 1)arly Thompson seconded the anotion. 1Motion oarried 3-0. 4.0 Iiesoltetioer forlie-funding ERMU, in conjunction with the City of Ells River, refinanced a building bond at a lower rate saving ERMU approximately $97,000. Theresa Slominski informed commissioners Chat a0er discussion with F,hlers & Associates it was determined a resolution was necessary. The resolution was reviewed. Page 2 Regulae meeting of the L7k River Municipal Utilities Commission April 13, 2010 Daryl Thompson moved to approvo the Resolution for Ro-funding. Jerry Gumphrey seconded the motion. Motion earried 3-Q. Resotution attached. 4.1 Review and Consider Water Tower Antenna Lease Agreement David Becg and Peter Beck have reviewed the lease agreement and consideration bid sent by Sprhrt, certain areas have been marked where they could improve upon. Mink Mathison asked Commission for direction on preference in order to proceed with the wording and request on the water towet• antenna lease agreement. Disoussion followed regarding whether the leasing company's equupmenC should be placed inside oa'ihe tower or if ERMU should require them to construct their own building outside. David Borg voiced his concern on the upkeep of the outer buildings in the future. Jerry Gumphrey commented if an ouCSide building was required, he would prefer ERMU to approve the plans prior to cmtstmction. john Dietz questioned if BRMU should construct the building and then charge the oompany. Daryl Thompson said her would prefer the equipmenC stay inside the tower. Dauid Berg said Sprint has aslwd for a Iwy. Daryl Thompson asked if Sherburne County had a ]cey, David Berg responded no. John Dietz said he wotild prefer the equipment be inside of thetowets buC would not want that to deter Sprint from signing the agreement. Staff and attorney will continue with the revision of the agreement and bring back to the commission for approval. 42 Review and Cmtsider Cnstonrer Deposit fl'odicv At tho March 9, 2010, ERMU Convnission meeting, a revised Customer Deposit Policy was approved. In conjtutctfon with the revised policy, staff has been working on a commmercial customer application/receipt. Troy Adams informed conunission that the form was not ready for the meeting however would be soon. The new form will be brought to Cite commission for final approval at the May ERMU Convnission meeting. Troy Adams said these az'e a few new commercial customers this would apply to uid is asking for authority Co use the form in the interim. Jerry (Gumphrey moved to give Troy Adams tide authority to use the eommereial customer application/receipt that will be provided to the wmmission at next month's meeting. Daryl Thompson seconded the moCion. Motion carried 3-0. 5.1 Review and Receive 2Q69 Financial Audit Andrew Becg of Abdo, Eick & Meyers presented the 2009 audit and answered questions. John Dietz said due to the City of Ellc River's new bond rating he would Iflce staff to cheok on ref naucing a bond that is at a higher rate. Jerry Gumphrey moved to approve and accepk the 2009 FSnancinl Audit. Daryi',8'hompson seconded the motion. Motion carried 3-0. Page 3 Regular meeting of the Elk River Municipal Utilities Commission April 13, 2010 John Dietz wanted to say hank you to Theresa Slominsld and Lorrie Franz on doing a good,job on financials and in preparing for the audit. The more information prepared for the auditors saves time and money for the Utilities. 5.2 Yieview and Consider f8zserves 1'olicy At the March 9, 2010, ERMU Commission meeting, the Inveshnont Convnittco provided an update on the ncod for a reserves policy. State was directed to draft a reserves policy and bring back to the Commission for review. Staff has utilized the resom~ees of MMUA, Ehlers and Associates, and Abdo, F.iclc & Meyers to compile and compare reserve policies and reserve target criteria from other Minnesota municipal utilities. Troy Adams reviewed the reserve criteria. A six month operating revenue less the depreciation along with the umual P 1'c I for next year is the recommended reserve policy. Tim Simon discussed the recommended roserve policy for the electric and water funds. John Dietz talked about the importance of having a policy and that it should be reviewed yearly. Consensus was for'froy Adams, Theresa Slominski, and Tim Shnon to draft a foemal reserve policy for adoption at the May ERMU Commission meeting. 5.3 Review and Consider CrediE Card Pa~nent ®g1&uns For several years now it has been a goal to have credit cards as an option fox customers to pay their bills. ERMLJ customers were st¢veyed back in 2006 and 71 % of the resprntdents wanted this service. The ofteting of credit cards comes at a cost for processing the payment, bt>t so do the rental of the drop boxos, and the staff for in house processing of payments. Depending on how you collect the credit card payment, the cost varies from 2% to 4% of the hunsaction total. Mier researoluug numerous credit card vendors, Paymentus is the credit card company that ERMU would like the eorntnission to consider working with for prroviding credit cu•d payments to customers. They offer a combination of services such as phone payments, web payment (throw a Ihilc from ow' website), and face Co Face. Additionally they allow you to set the processing cost at your comfort level by utilizing the convenience fee aY 100% rn' down to 0% to be passed on to fhc customer. The 0% would result in a 2.75% transaction fee to ERMU. llisct~ssion followed regarding transaction fees. Daryl Thompson and Jerry Gumphrey preferred the customer pay the convenience fee. John llietz said a time frame should be established to revisit the convenience fees. IAaryl Thompson moved to proceed with the Paymentus credit card company, have customers pay the convenience fee, smd re-evaluate In May 2011..lerry C7nmphroy seconded Ehe motion. Motion carried 3-0. 5.4 Reyieev and Consider W holesale Power Suntrly Cations At the March 9, 2010, ERMU Commission meeting, the convnission gave authorization for 'troy Adams to furthor explore whole sale power supply options. 74oy Adams talked about the recent power supply coalition meeting he attended which was organized by CMMl'A. At this meethig there Page 4 Regular meeting of the Ells River Municipal Utilities Commission April 13, 2010 were represent'at'ives from CMMPA, two othor municipal utilities, anothee public power joint action agency representing approxhnatcly 15 muricipal utilities, and. a representative for tluee small investor owned uWities QOU). At the time of Phis meeting, there was no commitment from any of the groups do participate, but rather gather infrnmation to take back to their governing bodies. 'Troy Adams discussed the offering of the proposed powet~ supply coalition. The process for participation in this coalition in Phase 1 is a rate study performed by R. W. Beck. EItMU ctmently has the one year associate membership with CMMPA that was part of the process of exploring the BSII project. This agreomcntruns thrnugh May 26`h ofthis year. This could betermhrated with funrre fees going to dre power coalition pro~am. John Dietz said he thought it would be a good idea to do a rate study whit R.W. Beck but to get a eonh'act with phases so ERMU could back out at atry time. Jerry Qiumphrcy moved to terminate associate membership with CMNTPA nn Apri126, 2014. 'naryl'i~hompson seconded the motion. 1Vdotion carried 3-0. Jerry Gumphrey moved to authorize Troy Adams fo proceed with phase 1 of the power supply coalition, not to exceed 520,000. IDaryN Thompson seconded the motion. N9otion carried 3-0. 6.1 Staff Undates Txoy Adams handed out a recent newspaper article regu~ding secondary faults. The article talks about the secondary elecn~ic service and who is responsible when it fails. Troy wanted to make sure it was understood that ERMU repairs secondary Faults and considers it part of the maintenance cost of ptnviding electricity to customers. Thorc was discussion regarding the water and wastewater mte forgiveness foe fire flushing of filters at the wastewater heatment plant and the backwashivg for the water towers. Troy Adams also updated the Commissioners on the Connexas board meeting he rccentiy attended. John Dietz asked "fheresa Slwninski about the dental insurance mte uzcrease. "fheresa Slominski responded that a meeting has been set up for Wednesday, April 14~h for her and Troy Adams to meet with the insw~ance agent and an update will be given at next month's meeting. 1"heresa Slominski wanted Lo give commissioners a heads up regarding die shut-offs drat will be ocow~ring on Apri120'" and 21s`. 'Troy Adams said IJHG will be conducting an emexgoncy training on Apri123`a and will be shutting down power and rturnhrg their engines. Lori Jolu~son said staff has been notified. Jerry Gumphrey asked if the homeowners in the area have been notified Troy Adams will work with Lori Johnson and UHG to notify them. Jeny Gumplrrey said he has received a lot of complaints on the envelopes. "Theresa Slominski said they aee working on improvurg the glue on the envelope. David Berg brought up the need for a policy or ordinance regarding new private wells. lliscussion followed. Lori Johnson stated Peter Beck has spent considerable time looking into tlils. Jerry Gumphrey moved to ask the Cily to look into a policy to prevent any ncryv private rvolls inside City Nimite. TDaryl Thompson seconded the motion. 1Viotion carried 3-0. Page 5 Regular meeting of the Elk River Municipal Utilities Commission April 13, 2010 John Dietz asked David Berg about his comment in his memo regarding the fustjonrt project with the City flushing hydrants. David Borg responded that water staff was able to aid the City in plowing over the whiter, now the City will aid in the flushing of hydrants. Mark Ptrclrs wanted the Commissioner's to larow that be appreciated Phil Hall help on procuring the state bid for the recently purchased trailer. Daryl Thompson commented that he likes to see the City of Elk River aid ERMU working together. John Dietz and Jen'y Gwrrphrey agFeed. John Dietz disfributed an article regarding a City implementiug a community lighting fee and another on wind power. A brief discussion followed. 6.2 Set Date for NextMeetine The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, May 11, 2010, at 4:00 p.m. 6.3 AdiournReeaiarMectin+~ 19ary1 Thompson moved to adjourn the regular mcoting of the );lie River Municipal UGIiGeS Commission meeting at 5:50 p.m. Jerry Gumphrey seconded tirc motion. Motion carried 3-0. Mhmtes prepa'ed by Judy McSpadden. ~~, Jo n Dietz President, ERMU Commission _ _ ~~~~ Tina Allard City Clerk ExUaet of Minutes of a Meeting of tha Board of Commnissioners of the Utilities Commission of the City ofElk River, Minnesota, Sherbumo Caunty, Mnuresofa Pursuant to duo call and notice thereof, a regular meotiug of the Hood of Commissioners of the Utititios Cormnissiws of the City of Elk River, Mlnnesota, was duly held in the City Hall hl dro City of Elk River, on April 13, 2010, commencing on or aftor 4:00 P.M. Thefo]lowingConm2ission~erJS.wereprosouC; ~t~~_ ~~ ~ i~/tf~r~~~~ J~~C-vl c~% Rd/ ~ 2 .%s@,YYy C7 Gz,rvc~33f24"".~~ / and the following were absent: r7 ~ smrc~ ~:e~ a: x~~ Commissioner ,okYY !°>." inrioducad the followln~ resohrtion and moved its adoption; •. „ RFSOI,UTIONNO. ~I~`~ RESOLUTION ACTCNOWLEbGINC.AND CONSENTING TO THE REFINANCING HY'1'HE O;l"I'Y OF ELIC R1VER., MINNESOTA OF CRRTAIN OUTSTANDING BONDS pF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELIC RIVER, MINNESOTA HH 1T R73SOLVFI) by the Board of Commissioners (the °Board") ot•the Lllc River Utilities Commission (the "Commission") as ftlllows: Section 1. Back¢rouud: Fia inbs. LOl. The Economic beveloprnent Authority of the City of Elk River, Minnesota (the ".EllA") !)roviausly issuad its Publio Safety Building Lease Revenue Bonds, Sories 2002A (City of lillc P.iver, IVlinnesota Lease Obligation), dated September 1, 2002 36G923v2 J8B IILI85d l (the "Series 2002A Bonds"), pursuant to a Mortgag~s and Security Agreement and Trust Indenture, dated September 1, 2002, between the EDA and U:S. Banle National Association, as trustee (the "TruaL'ee") (the "2002A Indentured and a resolution adopted by the FDA on August 12, 2002 (Cho "Series 2D02A ;Bond Resolution"). The proceeds of the ,Series 2002A .Bonds wexo used for construction and furnishing of a certain public safety facility (the "Safel:y Facility"). The City aurrently leases the Safety Facility puraugnt to a Loaso Agreement, dated September 1, 2002 (the ".Lease Agreement"), between the EDA, as lessor, and tl7e City, as lessee. Ths City has determined to terminate the :cease Agreement and purchase the Safety :['acility front 6he FDA by refunding the Series 2002A 12onds, which axe currently outstanding in the principal amount of $5,540,000, 1.02 The EDA also previously issued its City hall Expansion Revenue Bonds, Seriss 20028 (City of Ells River Lease Purchase Obligation), dated Septembor 7, 2002 (the "Series 20028 Bonds, pursuant to a Trust Indenture, dated November 1, 1997., as supplemented by a Supplement to Trust Indenture dated December 1, 1997, and. further supplemented by a Supplement to Tr.~ust Indenture dated September 1,L002, between the EDA and U.S. Banlc National Association (formerly 1~irst Trust National Association), as trustee (the "Trustee"} (oollentively the "20028 Indenture") and a resolution adopted by the EDA on AugusU 1`L, 2002 (bhe "Series 2002B Bond Resolution'). The proceeds of the Series 2002B Gonda were used for the expansion of the City Hall, including related furnishings, equipment and situ improvements (the "City Hall Facility"). The City currently lassos the City 1~'acility pursuant to a Lease Purchase Agreement, dated November 1, 1991, as supplemented by a Supplement to Lease Purchase Agreement dated Dscembor 7, 1997, as further supplemented by a Supplement to Lease Purchase Agreement dated Septembor 1, 200'2 (collectively the "Loaso Purchase Agreement"), between the h;DA, as lessor, and the City, as lessee. The; City subleases a portion of the City Hall Facility to the Commission. The City has determined to terminate the Lease Purchase Agreement and purchase the City Ball Pacilil;y from the EDA by refunding the Suries 2002B Bonds, which are currently outstanding in the principal amount of $7,270,OOD. 1.03 Pursuant to a resolution adopted by the City Couuai] of the City en March 75, 2010, the City has determined to issue its (7eneral OUligation Capital Improvement Plan Eonds, Series 2010A (the "Bonds•'") in the aggregate principal amount of $7,370,000, and use a portion of the proceeds of such bonds to finance the acquisition of the Safety Facility and the City Hall Facility and refund the outstanding Series 2002A IIonds and Series 20025 Bonds issued by the l?DA, Section 2. Aclmowlodgement and Consent, The Ccunmission hereby acknowledges urd consents to Cho acquisition of the Safety Faeiiity and the City Hall Facility and the refunding cf the outstanding Series 2002A Bonds and Series 2002.B Bonds by tike City. The Commission wi(1 coJttinuc to lattscs at porUOn of the City Hall Facility from the City, 766927JL JSn ¢LI85~11 Fho motion for the adoption of the foregoing resolution was duly seconded by 1V1eJnber ~K`, and upon vote being taken thereon, tha following voted in favorthereoP. and the following voted against: whereat>on said resolution was declared duly passed and adapted. 366927v2 JSa -LI65.11 STATE OF MINNESOTA ) COWi TY OF SHEItT3U1ZNE ) SS. CITY OF ELI{RIVP,R ) I, the undersigned, being the duly qualified and acting Secretary of Cha Elk River Utilities Commission, do heroby oortify that I have catefidly compared the attarohed and focegoiug extraoC of minutes of a regiJlar meeting of the board of Commissioners held on April 13, 2010, with the original O~ereof on file Cn my office and the same is a &tll, htire and complete CranscripY therefrom irrsofur as Clio seine relates to the twknowledging and oonsentfug Co the acquisition and refinancing by the City of the Safety Fucitlty uCCd the City Hall Facility. WITNESS my hand as Secretary and Ybis day aPApril, 2010. `~Tl-~t ~-~_""_____ Secretary Utilities Commission of the City of I±Ik River, Minnosola 7GG923v2 Ja}3 HU85-I I