3.1.B. ERMUSR 09-13-2011ELK RIVER MUNICIPAL UTILTTIES
REGULAR MEETING OF THE
UTILTTIES COMMISSION
HELD AT UTII,TI'IES CONFERENCE ROOM
August 9, 2011
Members Present John Dietz, Chair; Daryl Thompson, Vice Chair; Al Nadeau, Trustee
ERMU Staff Present: Troy Adams, Utilities Duector;
Theresa Slominski, Finance Duector/Office Manager;
Mazk Fuchs, Line Superintendent; David Berg, Water Superintendent;
Judy McSpadden, Recording Clerk
ERMU Staff Absent: Wade Lovelette, Technical Services Superintendent
City Staff Present: Bob Thistle, Interim City Administrator; Tim Simon, City Finance Director
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm
1.1 Call meetine to order August 9, 2011
John Dietz called the August 9, 201. I meeting to order at 3:30 p.m.
2.1 Consider Utilities Agenda
Al Nadeau said he would like to make an addition of 5.4 to the agenda.
Daryl Thompson moved to approve the revised August 9, 2011 Utilities Agenda. Al Nadeau
seconded the motion. Motion carried 3-0.
3.1 Consider Consent Agenda
John Dietz had questions on the water revenue, staff responded.
Daryl Thompson moved to approve the Consent Agenda as follows:
a. July Check Register
b. July 12, 2011 Regular Meeting Minutes
c. Financial Reports
d. Resolution 11-05
Al Nadeau seconded the motion. Motion carried 3-0.
4.1 Review and Consider Water Rate Analysis
At the July 12, 2011 Elk River Municipal Utilities (ERMLI) Commission meeting, information
was presented regazding the financial impact if the third tier water rate was removed. Staff was
directed to look at the scenarios specific to the commercial users. Theresa Slominski reviewed some
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Regulaz meeting of the Elk River Municipal Utilities Commission
August 9, 2011
of the options and the fmancial impact. Discussion followed regarding conservation efforts such as
the SMART Irrigation system, rain gardens, and project conserve. Consensus was to implement an
incentive program for the commercial customers only. Peter Beck was asked if this was possible, he
affinned. One example discussed was the requirement for future irrigation services to have the
SMART Irrigation system and existing irrigation services could stay out of the third tier if they
installed the SMART Irrigation system. John Dietz directed staff to come back with a proposal and
requirements.
5.1 Review and Consider Homeowner Water Service Insurance Program
The water line from the water main to the building is currently the responsibility of the property
owner. If there is a problem or leak, the average cost of repair for a residential service ranges
anywhere from $900 to $4000. There have been occasions where the customer has known about the
leak but has not fixed it due to the cost and it is before their water meter so they are not being chazged
for the excess water leaking. The hesitation in repair puts the water system, the customer, and their
neighbors in danger of cross contamination, structural damage, waterline bacteria and sediment
intrusion.
Rochester Public Utilities has a Water Service Insurance Policy in place for repairs that may
arise. John Dietz asked if this would be required of all customers or customer's choice, David Berg
responded it would be the customer's choice. Discussion followed. Peter Beck commented about a
recent decision from the State Court of Appeals that would give ERMU more authority regarding
abatement assessments. Consensus was to check on the abatement possibility before moving forward
with any water service insurance policy.
5.2 Review Study of NESHAP-RICE Re¢ulations and Their Impact on the
ERMU Power Plant
Under the current administration, the Environmental Protection Agency (EPA) has imposed
National Emissions Standazds for Hazardous Air Pollutants for Reciprocating Internal Combustion
Engines (NEST IAP-RICE) which will impact ERMU and the operation of our diesel Power Plant.
Currently these new regulations would require ERMU to install emission upgrades by 5/3/2013 to our
four diesel engines to continue to operate under our current contract with Great River Energy (GRE).
These regulations are designed to reduce pollutants related to the generation of electricity from
reciprocating internal combustion engines. The ERMU Power Plant is for all practical purposes an
"emergency backup" facility for GRE. The engines are maintained and exercised, but only run a few
hours a year. There is an exemption in the rules for emergency facilities, but ERMU would not
qualify because of the compensation received from the Power Transaction agreement with GRE.
Troy Adams commented that there has been much outcry from Midwest utilities dealing with similaz
concerns of these rules, so they are currently being reconsidered by the EPA. A study was conducted
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Regulaz meeting of the Elk River Municipal Utilities Commission
August 9, 2011
to detemtine ERMU's options. The ERMI_J 2011 budget included $100,000 to begin retrofitting the
engines. Troy Adams said he would bring back this topic and give an update at a fixture meeting.
5.3 Review the 2011 Budget Schedule, Travel and Training Budget, and
Dues/Subscriptions/Fees Budget
Troy Adams reviewed the Travel and Training Budget and the Dues/Subscription/Fees
projected for 2012. Troy Adams also talked about MMPA and the similarities ERMI_I has with the
members. More information will be provided at a future meeting.
5.4 Al Nadeau said he has talked with staff and is very concerned over the loss of a couple of
linemen because of the pay rates. He talked about the substantial cost associated with the training of
the lineman. Losing good quality people on a program where ERMU is falling behind on salary rates
needs to be looked at. He said he understands the economy but thinks it is important make a plan to
get back on track with the competitive wages so ERMU can keep quality people. John Dietz and
Daryl Thompson had no wmments at this time.
6.1 Staff Uudates
Troy Adams said ERMU has received letters of thanks from Princeton and Connexus for mutual
aid after the recent storms. Troy Adams also discussed the recent outage ERMU had due to the
storms, the communication with outside staff and office staff helped to define the outage azeas to
make the repairs go smoothly. The meter shop recently discovered an issue at the Otsego substation,
the problem was caught before a major outage occurred.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, September 13, 2011, at 3:30 p.m.
6.3 Adioum Regular Meeting
John Dietz moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission meeting at 4:55 p.m. Daryl Thompson seconded the motion. Motion carved 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
August 9, 2011
Minutes prepazed by Judy McSpadden.
John J. Dietz
Chao, ERMU Commission
Tina Allazd
City Clerk
RESOLUTION 11-OS
A RESOLUTION OF THE ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION AUTHORIZING AN AGREEMENT TO TRANSFER ELECTION
SHARE IN THE BROOKINGS-TWIN CITIES TRANSMISSION PROJECT FROM THE
CITY OF DELANO
BE IT RESOLVED by the Elk River Municipal Utilities Commission, hereinafter
"Commission", as the governing body of the Elk River Municipal Utilities, a Minnesota
municipal utility, ofthe City of Elk River, Minnesota (hereinafter referred to as "City"), as
follows:
Section L It was previously determined that it was in the best interest of the City to
participate in the Brookings-Twin Cities Transmission Project and the Commission previously
approved participation in the Brookings-Twin Cities Transmission Project through the Central
Minnesota Municipal Power Agency with a participation amount not to exceed $7,140,953
without further action of the Commission.
Section 2: An opportunity has arisen to acquire an additional participation interest
(election share) in the Brookings-Twin Cities Transmission Project from the City of Delano,
which has decided not to participate in the Brookings-Twin Cities Transmission Project.
Pursuant to the terms of an Agreement to Transfer Election Share, the parties to said Agreement,
being the City of Delano, the Central Minnesota Municipal Power Agency and five (5) other
cities already participating in the Brookings-Twin Cities Transmission Project, Delano will
assign its participation interest (election share) to six (~ cities, including the City of Elk River,
who are already participating in the Project.
Section 3: The additional cost to acquire a portion of the City of Delano's election shaze,
when aggregated with the amount of participation already approved by the Commission in the
Brookings-Twin Cities Project, does not exceed the total amount authorized in the previous
resolution.
Section 4: The Commission does hereby approve the Agreement to Transfer Election
Share to be entered into with the Central Minnesota Municipal Power Agency, the City of
Delano and five (5) other cities already participating in the Brookings-Twin Cities Transmission
Project.
Section 5: The additional expenditure necessary to acquire a portion of the City of
Delano's participation shaze in the Brookings-Twin Cities Transmission Project is hereby
authorized.
Section 6: The Commission Chairman and the Secretary are hereby authorized and
directed to execute the Agreement to Transfer Election Share for and on behalf of the
Commission, the same to be exclusively evidenced by such execution.
Adopted this 9~' day of August, 2011.
J Dietz, Chai
Attest:
Troy Adams, Secretary/Utilities Director
CERTIFICATE
I, Troy Adams, the Secretary of the Elk Rivet Municipal Utilities Commission, do hereby
certify that attached hereto is a true and correct copy of a resolution (other than the exhibits
thereto) duly adopted by the Commission at a meeting duly held on the 9~' day of August, 2011
notice of such meeting having been given in accordance with law and at which meeting a
quorum was present and acting throughout.
I also do hereby certify that such resolution has not been amended in any way from the
date of such adoption to the date hereof.
IN WITNESS WHEREOF I have hereunto set my hand this 9`h day of August 2011.
Troy Adams, Secretary/Utilities Director