06-12-2012 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
June 12,2012
Members Present: John Dietz, Chair; Daryl Thompson,Vice Chair;Al Nadeau, Trustee
ERMU Staff Present: Troy Adams, General Manager;
Theresa Slominski, Finance and 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 Firm;
Steve Downer and Greg Oxley,MMUA; Kayla Brennan,McGrahn Shea
1.0 CALL MEETING TO ORDER
John Dietz called the June 12,2012 meeting to order at 3:30 p.m.
1.1 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.2 Consider Utilities Agenda
John Dietz added another item under Other Business.
Daryl Thompson moved to approve the June 12,2012 Utilities Agenda. Al Nadeau seconded
the motion. Motion carried 3-0.
2.0 CONSENT AGENDA(Approved By One Motion)
John Dietz had questions on the check register and financials, staff responded. Discussion
followed regarding the NSF policy and the processing of deposits.
Daryl Thompson moved to approve the Consent Agenda as follows:
2.1 May Check Register
2.2 May 8,2012 Regular Meeting Minutes
2.3 Financial Statements
2.4 Wellhead Protection Plan
2.5 Video Security System
2.6 CMMPA CAPX2020 Project Revenue Bonds Disclosure Acknowledgement Letter and
Exhibit E to Bonds Purchase Agreement
2.7 Annual Water Quality Report
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Regular meeting of the Elk River Municipal Utilities Commission
June 12,2012
2.8 Capacity Credit Agreement Notice of Termination Extension
2.9 Pay Equity Compliance
2.10 Policy for Returned Un-Paid Items Revision
Al Nadeau seconded the motion. Motion carried 3-0.
3.0 OPEN MIC
No one appeared for open mic.
4.0 OLD BUSINESS
4.1 Conflicts of Interest Policy
At the May 15, 2012 ERMU Commission meeting, the Minnesota Statute regarding public
officers and conflict of interest was discussed. The ERMU Commission directed staff and legal
counsel to develop a Conflicts of Interest Policy.
A policy mirroring the City of Elk River's conflict of interest policy consistent with
Minnesota Statute was developed. In addition, a Resolution Authorizing Contract with an
ERMU Board Member or Employee and an Affidavit of Official Interest in Claim templates has
been developed.
Daryl Thompson moved to approve the Conflicts of Interest Policy and supporting
documents. Al Nadeau seconded the motion. Motion carried 3-0.
5.0 NEW BUSINESS
5.1 Year-End Reserves Balances
Per ERMU Reserves Policy, annually after the audit the year-end reserve balances shall be
reviewed and the ERMU Commission shall consider any balances above or below target levels.
Theresa Slominski reviewed the cash balances of the electric and water departments. Discussion
followed regarding the unrestricted funds. John Dietz said he would like to designate some of
the unrestricted funds for territory acquisition. Troy Adams said $1 million of the unrestricted
balance was to cover the PCA's in 2012 and 2013.
Daryl Thompson moved to approve that the balance in the unrestricted working capital
reserves would be designated as working capital for the electric, one million has been
designated to use for the PCA's and the balance would be to remain as working capital
designated for future use for territory acquisition or capital projects. The water
unrestricted balance to be designated as working capital with the intended future use of
capital projects. Al Nadeau seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
June 12,2012
5.2 Jackson Street Water Tower Repairs—Verbal
At the May 15, 2012 ERMU Commission meeting staff was directed to get quotes on
repairing the lid on the Jackson Street Water Tower. Bolton Menk has worked with ERMU on
previous projects and is familiar with the Jackson Street Water Tower. They have informed
ERMU that because of the way the ladder was affixed to the tower, the lid should be fine.
Discussion followed. Consensus was to leave the tower as is.
5.3 Electric Service Territory Acquisition Options
In 1974 Minnesota legislation established a municipal utility's right to grow with their city
by acquiring electrical service territory as their city annexed additional area. This historic
legislation was supported by both the municipal utilities as well as the cooperative electric
utilities.
Kayla Brennan of McGrahn Shea law firm discussed the process of acquiring electric
service territory. Discussion followed. John Dietz said ERMU should start territory talks now,
Troy Adams agreed.
Daryl Thompson moved to support developing an offer to acquire remaining electric
service territory within the city limits of Elk River. Al Nadeau seconded the motion.
Motion carried 3-0.
6.0 OTHER BUSINESS
6.1 Staff Update s
Troy Adams noted the MMPA invitation and if two or more commissioners were going a
quorum notice would have to be posted. Troy Adams gave an update on the EPA RICE rule
changes and the GRE annual meeting he recently attended.
John Dietz asked Tom Sagstetter if he has talked to a lot of customers that are in the third
tier water rate. Tom Sagstetter responded since the letters were sent he has not heard from
anyone.
John Dietz asked staff how the printing bids came out, Troy responded.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday,July 17,2012, at 3:30 p.m.
6.3 Closing of Meeting: "Meeting to be closed pursuant to MN Statute 13D.05, Subd.
3(c)(3) to develop or consider offers or counteroffers for the purchase or sale of real
or personal property."
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Regular meeting of the Elk River Municipal Utilities Commission
June 12,2012
a. Call Closed Session to Order
b. Discussion
c. Adjourn Closed Session
In closed session the ERMU Commission decided to pursue developing an offer and directed
staff to get proposals from consultants on territory acquisition.
6.4 Adjourn Regular Meeting
Al Nadeau moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission at 5:30 p.m. Daryl Thompson seconded the motion. Motion carried 3-0.
Minutes prepared by Judy McSpadden.
J n J. Dietz IP
air,ERMU Commission
V
OF
Tina Allard
City Clerk