04-12-2011 ERMU MINELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
Apri112, 2011
Members Present John Dietz, President; Daryl Thompson, Vice Chair; Al Nadeau, Trustee
ERMU Staff Present: Troy Adams, Director of Operations;
Theresa Slominski, Finance Director/Office Manager;
Mark Fuchs, Line Superintendent; David Berg, Water Superintendent;
Wade Lovelette, Technical Services Superintendent;
Judy McSpadden, Recording Clerk
City Staff Present: Lori Johnson, City Administrator
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm
Andrew Berg, Auditor from Abdo, Eick & Meyers, LLP
1.1 Call meeting to order Apri112, 2011
John Dietz called the April 12, 2011 meeting to order at 3:30 p.m.
2.1 Consider Utilities Agenda
Troy Adams added two joint meeting minutes under the consent agenda.
Daryl Thompson moved to approve the April 12, 2011 Utilities Agenda. AI Nadeau seconded
the motion. Motion carried 3-0.
3.1 Consider Consent Agenda
Dazly Thompson had questions on the check register, staff responded.
Al Nadeau moved to approve the Consent Agenda as follows:
a. March Check Register
b. March 7, 2011 Joint Meeting Minutes
c. March 8, 2011 Regular Meeting Minutes
d. March 14, 2011 Joint Meeting Minutes
e. Financial Reports
Daryl Thompson sernnded the motion. Motion carried 3-0.
4.1 Review of Citv Ordinance 78-51 WATER USE RESTRICTIONS and Elk River
Municiual Utilities' 2009 RESOLUTION IMPOSING WATER USE RESTRICTIONS
WITHIN THE CITY OF ELK RIVER **POSTPONED UNTIL .TUNE**
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Regulaz meeting of the Elk River Municipal Utilities Commission
April 12, 2011
4.2 Power Supaly Options /Resource Plannin¢ Update
In September 2008, Connexus Energy ternunated the 10-year rolling "all requirements" power
contract with ERMU. In Apri12010, the Utilities Commission authorized entering into "Phase 1" of a
resource planning study with a coalition which includes Central Minnesota Municipal Power Agency
(CMMPA) as a participant. In September 2010, the Utilifies Commission authorized entering into
"Phase 2" of a resource planning study which includes the release of a Request For Proposal (RFP).
The RFP was issued on November 15, 2010.
On March 25, 2011, staffparticipated in a CMMPA webinaz for general discussion on the
bidders. Troy Adams reported that Peter Beck has spent a lot of time going through the
confidentiality contracts. Troy stated he would be attending a meeting on Friday, April 15, 2011, to
finalize the confidentiality agreements and select a short list of bidders. No action taken.
5.1 Review and Receive 2010 Financial Audit
Andrew Berg of Abdo, Eick & Meyers presented the 2010 audit. Discussion followed. John
Dietz asked Theresa Slominski if ERMU could prepare the audit reports like the City of Elk River
currently does, Theresa Slominski and Andrew Berg said that could be done. John Dietz thanked
Theresa Slominski and Lorne Franz for doing a great job.
Daryl Thompson moved to accept and file the 2010 audit. Al Nadeau seconded the motion.
Motion carried 3-0.
5.2 Review 2010 Annual Utilities Resort
Even in these times of economic downturn, Elk River Municipal Utilities (ERMU) continues to
grow. In 2010, our purchased energy increased by 6.9%. Based on the most recent data available,
ERMU has moved up to now be the 9a' largest Minnesota municipal electric utility by number of
customers and the 12"' largest by energy sales. This growth helps ERMU, our customers, and the
residents of the City of Elk River. Because ERMU is tax exempt, ERMU provides to the City of Elk
River a fixed percentage of the revenue from Elk River customers' electric sales. This amount is a
Payment in Lieu of Taxes (PILOT). In addition to this percentage of revenue, ERMU provides
donated electricity for non-enterprise City facilities as well as donated labor. In total, ERMU provided
approximately $1,100,000 in 2010. This was up 7.7% over the 2009 PILOT and up 14.9% over 2008.
This trend is directly related to the growth of the ERMU. The ERMU PILOT is a significant
contribution to the City which indirectly helps to keep City taxes lower.
Troy Adams reviewed the 2010 Annual Utilities report. Some of the highlights were discussed.
In 2010, ERMU was awarded the System Innovation Awazd from Minnesota Municipal Utilities
Association. The awazd was presented to ERMU "in recognition for its leadership and innovation in
customer service, energy efficiency, renewable energy or technology use, which has improved service
to its community and enhanced public power's prestige." Staff implemented the option for credit card
payments. The electric department had an increase in sales. Discussion followed regazding the Data
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Regulaz meeting of the Elk River Municipal Utilities Commission
April 12, 2011
Center's usage and contracts. Staff has been cross training the locators for meter reading. The water
department has about 900 more meters to upgrade or change-out.
5.3 Review and Consider Trailer Purchase
Trailer bids were recently received for the directional bore rig that was approved at the March
ERMU Commission meeting. Staffrecommends purchasing the trailer from St. Joseph Equipment,
the lowest bidder.
AI Nadeau moved to award the trailer purchase to St. Joseph Equipment for $15,476.50. Daryl
Thompson seconded the motion. Motion carried 3-0.
5.4 Review and Consider 19` Ouarter Write-Offs
Correction from the Agenda -This should be the approval of the 1 ~` Quarter write-offs. The 1 ~`
Quarter Write-offs were reviewed. These amounts cover items from October 2010 through March
2011, totaling $19,664.08. Over $16,000 of this will be sent to a collection agency for further
collection efforts and $3,402.09 will be assessed this fall for the assessable services of water, sewer,
and trash.
Daryl Thompson moved to approve the la` quarter write-offs as presented. AI Nadeau seconded
the motion. Motion carried 3-0.
5.5 MMUA Leeislative Rally Update
Troy Adams gave an update of the MMUA T.egislafive Rally he recently attended. No action
taken.
6.1 Staff Updates
Troy Adams asked for the Commissioners approval to start looking into a replacement for the
Marketing and CIP Consultant, Vance Zehringer. Discussion followed regazding the time line.
Consensus of the Commission was to start the process.
Theresa Slominski updated the Commissioners on how smoothly the afterhours CRC transition
went. The credit card payment activity continues to rise.
David Berg discussed the progress of the Abandoned Well Sealing Cost Share Agreement.
Every yeaz ERMU is required to send out a Water Quality Report to all water customers. David Berg
said he would like to get the community involved with the design for next yeaz. There would be a
contest for anyone 18 years and under that would be awazded a $50 prize if their picture was chosen
for the cover of the report. Consensus of the Commission was to go forwazd with this.
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Regulaz meeting of the Elk River Municipal Utilities Commission
April 12, 2011
Wade Lovelette informed the Commission on the recent discovery that was detected by the
thermal imaging camera at the substation. If this had not been detected it would have caused a major
outage. In the past this was done by Great River Energy every five years. Now ERMU is able to do
this every year. This is one of the jobs that the Locator does during the winter when locates are low.
Mazk Fuchs said staff is doing a sheet light count to verifying the billing is accurate and the
mapping is correct.
6.2 Set Date for Next Meetine
The next regulazly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, May 10, 2011, at 3:30 p.m. A special closed meeting will follow to conduct a perfotntance
evaluation of the Director of Operations, Troy Adams pursuant to MN Statute 13D.05, subd. 3(a).
6.3 Adjourn Reeular Meetin¢
Daryl Thompson moved to adjourn the regular meeting of the Elk River Municipal
Utilities Commission meeting at 4:55 p.m. AI Nadeau seconded the mofion. Motion carried 3-0.
Minutes prepared by Judy McSpadden.
J J. ietz
Pres/ide_nt, E / Commission
`` l
`_" l ~ - ~_
Tina Allard
City Clerk