11-13-2012 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
November 13,2012
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;
Scott Thoreson, Tom Geiser, Grant Orrock,Dick Wagner, Chris Sumstad,
Tricia Pope,Mike Thiry
Others Present: Cal Portner, City Administrator;
Peter Beck,Attorney from Gray Plant Mooty Law Firm;
1.0 CALL MEETING TO ORDER
John Dietz called the November 13,2012 meeting to order at 3:30 p.m.
1.1 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.2 Consider Utilities Agenda
Al Nadeau moved to approve the November 13,2012 Utilities Agenda. Daryl Thompson
seconded the motion. Motion carried 3-0.
2.0 CONSENT AGENDA(Approved By One Motion)
Daryl Thompson moved to approve the Consent Agenda as follows:
2.1 September Check Register
2.2 October 9,2012 Regular Meeting Minutes
2.3 Financial Statements
2.4 Assessments
2.5 Diesel Power Plant Capacity Credit Agreement
2.6 Amendment to Tower Attachment Agreement
Al Nadeau seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13,2012
3.0 OPEN MIC
No one appeared for open mic.
4.0 OLD BUSINESS
4.1 Power Supply Options/Resource Planning
In September 2008, Connexus Energy terminated the 10-year rolling "all requirements" power
contract with Elk River Municipal Utilities. In April 2010, 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
Utilities 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 Utilities Commission authorized entering into "Phase 2b" of the
resource planning study which included risk assessment of the proposals. In addition to working
with the Resource Planning Coalition, staff continues to explore other power supply options.
Troy updated the Commission on a meeting he and Al Nadeau attended for Missouri River
Energy Services (MRES) Area on October 25`h in Alexandria, MN. Both felt this is a very well-
run organization. Troy also met again with another agency to discuss options. Daryl Thompsen
inquired as to when a decision will be made regarding our final candidate(s) for power supply
options. Troy responded it would most likely be in early 2013.
5.0 NEW BUSINESS
5.1 Landfill Gas to Electric 10 Year Anniversary
On October 10`h ERMU hosted a 10 year anniversary celebration at the landfill to electric
generation facility. The event took place in the Environmental Learning Center and was
well attended with 44 individuals attending. Present and past County Commissioner's
staff was in attendance along with representatives from Waste Management, the City of
Elk River, Star News, Minnesota Division of Energy Resources, and other interested
groups.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13,2012
5.2 Wage and Benefits Committee Update
In October 2011 Utilities Commission formed a Wage and Benefits Committee. The
Utilities Commission created the committee to be comprised of one Commissioner, John
Dietz—Utilities Chair, and three Utilities managers: Troy Adams—General Manager,
Theresa Slominski —Finance and Office Manager, and Mark Fuchs— Electric
Superintendent. The intent for the creation was to have the committee review and
analyze wage and benefits information, receive comments and questions from employees
relating to wage and benefits, function as a forum for discussion, and ultimately present
select wage and benefit information to the Utilities Commission for action.
The Wage and Benefits Committee met on October 16111 and 306h. The Committee
determined the following items should be presented to the Utilities Commission for
consideration, and an opportunity to ask questions or give direction for research to bring
back items for December's meeting:
Wages—Trendwise, with various other utilities it is a 3% increase for 2013, to get to the
previous metro average a 7% increase, to match the co-ops it is a difference of 10%. The
current budget reflects a 3% increase and the lineworkers have formally submitted a
request for a 7% COLA. COLA will be talked about next month.
Dental — Recommending no change and renew the current plan with the 5.5% increase.
Other—
I. A performance Metrics program—implement a program where the employees
are incentivized to contribute to the company's success. If the company is
doing well and certain standards are met, the employees can participate in that
success. It would be a way for us to "close the gap" between the co-ops and
the utilities wage differences.
Troy asked for commission feedback on this program. John commented on
making the standards attainable yet challenging enough. He also stated that
the percentages should be different. He felt that the most important would
be reliability and the bottom line, and questioned appropriate reflection of the
bottom line.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13, 2012
It was decided to reduce the number of categories from 5 to 4 by combining
Customer Service and Employee Development into one category and focus on
customer satisfaction rating in surveys as the measure; increase the categories'
percentages from 20% to 25%; and within the financial goals, change
"Revenue" to Net Profit and weight it at 10%. Setting the percentage to
award to staff would be evaluated every year as the performance scorecard
results are evaluated. This would be implemented in 2013, to review and
award in 2014. Staff was directed to redo the chart and bring back to the
commission in December.
Since this will lag until 2014 for payment, perhaps a mid-year bump in pay
could be considered for 2013 to help offset COLA and "the gap" in pay for
next year. This will be brought back in December also, along with the dollars
associated with a 1%, 2%, or 3% increase.
2. On-Call Residency Rule— expanding the current requirement of on-call
employees to live with a 12 mile radius to either a 15, 18, or 20 mile radius. It
was determined that a 20 mile radius could be implemented.
Daryl Thompson made a motion to expand the On-Call Residency Rule Radius
to 20 miles.Al Nadeau seconded the motion. Motion carried 3-0.
3. Nightwork Rest Time—Lineworkers have requested that the time period be
modified to 10:00pm through 6:00am. This shifts the start of the period back 2
hours and the end of the period back 1 hour, effectively increasing the coverage
period by 1 hour. Discussion followed.
Al Nadeau made a motion to change the Nightwork Rest Time from 10:00pm
through 6:00am,Daryl Thompson seconded the motion. Motion carried 3-0.
4. Sick Time Conversion - Employees have requested that the maximum
conversion be increased from 100 days to 120 days to be consistent with the
sick time bankable hours allowed by policy.
Daryl Thompson made a motion to change the Sick Time Conversion
maximum from 100 days to 120 days,Al Nadeau seconded the motion. Al
Nadeau and Daryl Thompson voted aye,John Dietz voted nay. Motion
carried 2-1.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13,2012
5. Meal Per Diem - The Committee discussed establishing a per diem
reimbursement policy versus the current practice of submitting receipts and being
reimbursed. It was decided that the current policy of reimbursing for actual
receipts submitted is adequate and no motion was made to change.
6. Longevity Pay - The Committee also discussed longevity pay and elected to
submit the topic to the Commission for consideration. Staff is currently surveying
other utilities for comparison data. Information will be brought to the
Commission for consideration at a future meeting.
5.3 Review 2013 Budget: Water&Electric Rates
The revenue and expense budgets,capital budgets,travel and training, and CIP budgets were
presented. We received confirmation that GRE's preliminary rate increases are final and
results in a 4.5%rate increase needed for our electric budget.
The water rate increase needed was 5%and at the October meeting it was determined that was
too high. Staff brought back a suggested rate increase of increasing the first tier$.15 and
increasing the base monthly charge for all meter sizes,resulting in a 5% increase overall. Staff
asked for either acceptance of the proposed rates or direction in bringing back a different rate
increase and at what compromises (reduced reserves,unbalanced budget, bonding, etc.)
The commission asked questions on GRE's rate, training, Ipads, and water rates. The
commission gave direction to increase revenue overall 2.5%. Increasing the fixed charge and
the usage fees to meet this increase should be determined by staff and brought back to the
commission. Additional questions followed on contributions to the City, customer accounts
expense, legal fees, employee related expenses,and water services. The travel and training
budget was also reviewed and John stated that only one out of state travel for APPA should be
necessary,either the annual meeting or the legislative meeting but not both. Discussion on the
tangible benefits of both these meetings followed. The final budget will be voted on next
month.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13,2012
Troy asked about the membership in the I-94 chamber and whether it should continue and the
commission agreed it should. Troy also asked about budgeting for additional staff of an
Executive Assistant and a Key Accounts person. Prioritization of the two positions
determined that an Executive Assistant would provide the most benefit and to be hired January
1,2013 rather than mid-year. Troy also mentioned that he had a consultant that could provide
us with a water rate study for approximately$10,000 if we wanted to pursue that. We have
had previous experience working with this individual when he worked for RW Beck.
5.4 LED Holiday Light Contest Update
Tom gave an update on the Holiday Light contest. The marketing information for the event is
included. A few applications have been requested and one has been returned so far. Hopefully
we will have more applications.
6.0 OTHER BUSINESS
6.1 Staff Updates
Troy was elected Vice Chair at the MMUA board meeting. The closing is final on 1639
Main Street and we have an agreement worked out for the property management with a
local businessman. Troy asked for commission approval to execute the agreement and it
was granted. There are some items to bring up to code on the house and so the house
most likely will not be rented until 2013. We are working with the City and the LMC to
implement some recommendations on ergonomics in the field.
Tom accompanied Annie and Clay from the City to the Minnesota Commercial
Association of Realtors (MNCAR) event to help market the data center program.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday,December 11,2012,at 3:30 p.m.
The Commission recessed the regular meeting at 5:30 p.m.
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Regular meeting of the Elk River Municipal Utilities Commission
November 13, 2012
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."
a. Call Closed Session to Order
b. Discussion
c. Adjourn Closed Session
6.4 Adjourn Regular Meeting
Daryl Thompson moved to adjourn the regular meeting of the Elk River Municipal
Utilities Commission at 5:37 p.m. Al Nadeau seconded the motion. Motion carried 3-0.
Minutes prepared by Theresa Slominski.
11111/14 :�.'' 4
J,J' J. 'b ietz
10 air, ERMU C is on
Tina Allard
City Clerk