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04-10-2012 ERMU MINELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM Apri110, 2012 Members Present: John Dietz, Chair; Daryl Thompson, Vice Chair; Al Nadeau, Trustee ERMU Staff Present: Troy Adams, Utilities Director; Theresa Slominski, Finance Director/Office Manager; Mark Fuchs, Line Superintendent; David Berg, Water Superintendent; Wade Lovelette, Technical Services Superintendent; Tom Sagstetter, Conservation & Key Accounts Manager; Judy McSpadden, Recording Clerk Others Present: Cal Portner, City Administrator; Peter Beck, Attorney from Gray Plant Mooty Law Finn; SMMPA Representatives, David Geschwind, Executive Director &CEO; Larry Johnston, Director of Corporate Development, Agency Relations and Officer of Legislative & Regulatory Affairs 1.1 Call meetin¢ to order Apri110, 2012 John Dietz called the April 10, 2012 meeting to order at 330 p.m. 2.1 Consider Utilities Agenda Daryl Thompson moved to approve the Apri11Q 2012 Utilities Agenda. AI Nadeau seconded the motion. Motion carried 3-0. CONSENT AGENDA (Approved Br One Motion) John Dietz had a question on the check register, staff responded. Daryl Thompson moved to approve the Consent Agenda as follows: 3.1 March Check Register 3.2 March 20, 2012 Regular Meeting Minutes `°~. 3.3 Financial Reports 3.4 Approval of Capacity Credit Agreement Notice of Termination Extension AI Nadeau seconded the motion. Motion carried 3-0. OPEN MIC No one appeazed for open mic. Page 2 Regular meeting of the Elk River Municipal Utilities Commission April 10, 2012 4.1 Update on Power Supply Options 1 Resource Plannin¢ hi September 2008, Connexus Energy terminated the 10-yeaz rolling "all requirements" power contract with Elk River Municipal Utilities (ERMU). ERMU Commission authorized entering into "Phase 1" of a resource planning study in April of 2010, with a coalition which includes Central Minnesota Municipal Power Agency (CMMPA) as a participant. In September 2010, ERMU 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. In May 2011, the ERMU Commission authorized entering into "Phase 2b" of the resource planning study which will include risk assessment of the proposals. In addition to working with the Resource Planning Coalition, staff continues to explore other power supply options. Troy Adams said over the last couple of months ERMU has talked about different options available for our wholesale power contract. Troy Adams introduced the representatives from Southern Municipal Power Agency (SMMPA) to give an overview of their agency. Discussion followed. 4.2 Review and Consider Holiday L.E.D. Li¢htina Award Pro~am At the Mazch 2Q 2012, ERMU Commission meeting, staff was directed to research the holiday lighting contest that Princeton Public Utilities sponsors. Tom Sagstetter reviewed the costs associated with a lighting contest. The one requirement of Princeton was that they must be an electric customer. John Dietz agreed that participants should be an ERMU electric customer and asked what the other commissioners thought. More discussion followed. AI Nadeau and Daryl Thompson thought it was worth a try. John Dietz said he would like to try it on a one yeaz basis. AI Nadeau moved to try for one year, the program for Holiday Lighting. Daryl Thompson seconded the motion. Motion carried 3-0. 4.3 Update on Water Conservation Pro~am At the March 20, 2012, ERMU Commission meeting, staff was directed to bring back the commercial irrigation water conservation program marketing information and discuss implementation of the new pilot program. There has been discussion in the past months on laws that pertain to water conservation programs for Public water suppliers serving more than 1,000 people. hi Apri12012, Governor Mark Dayton signed into law, water conservation measures that are consistent with the commercial irrigation water conservation pilot program. The new law states that, "Public water suppliers serving more than 1,000 people must encourage water conservation by employing water use demand reduction measures..." The Commercial Irrigation Water Conservation Program would meet or exceed the requirements of the law. Page 3 Regulaz meeting of the Elk River Municipal Utilities Commission April 10, 2012 Tom Sagstetter reviewed the marketing brochure and application. Discussion followed. David Berg provided a cost savings analysis for 2011 of the customers that are on the SMART Irrigation program. The statistics show an average of 43% savings on their water consumption. 5.1 Review 2011 Annual Report to the Utilities Commission Troy Adams discussed the 2011 ERMU Annual Report. Extra reports were printed so the City of Elk River could provide them to potential businesses that are looking into moving to this area. Discussion followed. Consensus of the Commission was this was a professional looking report and to let staffknow they did a great job. 5.2 Review and Consider Mini Excavator Purchase Approved in the 2012 budget was a mini excavator. RDO Equipment was awazded the State Bid for Hitachi compact excavators. Mark Fuchs reviewed the state bid and the reason for this purchase. Al Nadeau moved to approve the purchase of the 2012 Hitachi Compact Excavator as presented for $30,410. Daryl Thompson seconded the motion. Motion carried 3-0. 5.3 Review and Consider ls` Quarter Write-Offs First quarter write-offs cover items from December 20] 1 through March 2012 and total $30,960.61. This amount is comprised of $2,750.98 sent to a collection agency, and $1,471.70 that will be written off with no further collection effort. Utilizing the Revenue Recapture program available through the state, ERMU submitted $24,015.61 to be collected, and there is also $2,722.32 that will be assessed this fall for the assessable services of water, sewer, and trash. Discussion followed. AI Nadeau moved to approve the 1g` quarter write-offs as presented. Daryl Thompson seconded the motion. Motion carried 3-0. 5.4 Review and Consider Private Water Line Repair Costs Memorandum of Understandin¢ At the Apri12, 2012, Elk River City Council meeting, an Ordinance was adopted allowing for the assessment of costs associated with private utility line repairs which included a Petition, Waiver, Agreement and Policy based on the Ordinance, and a Memorandum of Understanding with Elk River Municipal Utilities regazding Payment of Private Water Line Connection and Repair Costs. Page 4 Regulaz meeting of the Elk River Municipal Utilities Commission April 1 Q 2012 Troy Adams reviewed the policy and agreements and recommends flagging the properties that have sewer and water available but have not hooked up which is currently around 200. If their septic or well fails we can require them to hook up to the sewer and water system. Al Nadeau moved to approve and execute the Memorandum of Understanding with the City of Elk River regarding the Private Water Line Repair Costs. Daryl Thompson seconded the motion. Motion carried 3-lt. 6.1 Staff Uadates Troy Adams updated the Commission on the possible sale of the previous meter reading system, temtory acquisition, and a dispersed generation customer. John Dietz asked when the Jackson Street water tower would be going on the National Historic list. Discussion followed regazding upkeep and ownership. John Dietz asked what the response was on the surveys from the Expo, Theresa Slominski responded. John Dietz also asked how Energy Alley was perceived at the Expo, Tom Sagstetter responded. David Berg asked Commission if there could be two prizes awazded for the contest for the cover of the Water Conservation report, $50 for first place and $25 for second place. Daryl Thompson moved to add a second place award for the Water Conservation Report cover contest, retroacfive to the contest for this year. Al Nadeau seconded the motion. Motion carried 3-0. Mazk Fuchs updated the Commission on the downtown lot where the building was removed and what the future plans were for lighting in this area. 6.2 Set Date for Next Meetin¢ The next regulazly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, May 8, 2012, at 3:30 p.m. The regular meeting of the Elk River Municipal Utilities was recessed at 5:15 p.m. 6.3 Closing of Meeting The Commission reconvened to a closed meeting at 5:20 p.m. pursuant to MN Statute 13D.05, Subd. 3(a) for an employee performance evaluation of Utlities Director Troy Adams. There being no further business, John Dietz closed the special meeting at 6:34 p.m.