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3.0 ERMUSR 06-08-2004 ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION May 11,2004 Members Present: Jerry Takle, President; James Tralle,Vice Chair;John Dietz,Trustee Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent; David Berg, Water Superintendent; Patricia Hemza, Office Manager Other Employees Present: Wade Lovelette,Mark Fuchs, Art Gatchell, Richard Wagner,Vivian Schmidt Other Present: Steve McDonald,ABDO, EICK&MEYERS, LLP 1. Call meeting to order May 11,2004 President Jerry Talde called the May 11, 2004 meeting to order. 2. Consider Utilities Agenda James Tralle moved to approve the Agenda for the May 11, 2004, as presented. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz questioned the amount of overtime paid to employees. Staff responded that the summer hours schedule is needed to keep up with the new developments and rebuilding of lines. James Tralle moved to approve the Consent Agenda as follows: April Check Register April 13, 2004 Minutes Financials John Dietz seconded the motion. Motion carried 3-0. 5.1 Staff Up-dates Bryan Adams updated the Commission on an electrical fire GRE had at one of their shared facilities which will cause a rise in ERMU's purchased power cost. ERMU will in turn need to add PCA to future billings to compensate for increased costs. Bryan also notified the Commission of the EDA's strategic plan to promote industrial growth in Elk River. This plan is in response to the industrial and commercial growth in the adjacent communities. The City council is also going through a strategic planning process to establish common goals and priorities. The City council and developer have agreed to the downtown building concept. It is a possibility the City and ERMU will be asked to forgo SAC and WAC fees for this project. The Hwy 101 project was reviewed with the layout of the two intersections that will effect ERMU. Glenn Sundeen informed the Commission that 32 new services were installed in the month of April along with the updates of the current projects. He also added that the outages from Sundays storm were minimal. David Berg reported that the Foster Tower passed bacteria tests and will be put on line. Well #8 is almost complete. There were four new security systems installed in the month of April. The meter change-out program is going well. Page 2 Regular meeting of the Elk River Municipal Utilities Commission May 11,2004 Patricia Hemza updated the Commission on how well the move to the new location went,and that the Audit was finished. James Tralle questioned the amount of walk-in customers. Just being at the new location for one week, staff responded it was too early to tell. To accommodate the auditor,the audit report was moved to the next agenda item. 6.1 Review and Consider 2003 Audit Steve McDonald of ABDO,EICK&MEYERS,LLP went through the audit results with the commission. He reported on the new GASB #34 government accounting process, and the resulting changes that affect the Utilities financials. In the Schedule of Findings report there was only one issue of concern and that was the collateral amount. Steve McDonald then discussed the electric rate structure and the addition of water mains constructed and paid for by developers that were not previously on the Utilities books. The yearly depreciation will be substantial because of this newly acquired accounting process. John Dietz asked if there were any concerns that they should be aware of. Steve responded that he has been auditing the Utilities for several years and did not see any alarming trend or notice any discrepancies. John Dietz moved to accept and file 2003 Elk River Municipal Utilities audit,James Tralle seconded the motion. Motion carried 3-0. 5.2 Review and Consider Employee Wage Request Bryan Adams indicated to the Commission the three issues to be resolved are, salary increase, percentage of employees contribution to health insurance and proposed crew rest provision. John Dietz commented on the Utilities wanting to be competitive with the local surrounding pay rates but then they should also compare the health insurance. He then states he was in favor of the 3.27%wage increase without the health insurance adjustment but that he was not in favor of the crew rest provision. Discussion followed regarding the need for crew rest provision. John Deitz asked what the cost per year for this new program would be and Bryan estimated it to be $2000 to$4000. James Tralle asked if this was a real safety issue with Bryan and Glenn both replying yes. James Tralle moved to analyze for 1 year the night call out work and respond to the issue next year. John Deitz seconded the motion. Motion carried 3-0. James Tralle moved to approve the 3.27%wage increase for all employees and no change in employee contribution to health insurance. John Dietz seconded the motion. Motion carried 3-0. Bryan Adams asked for an increase in consulting pay for Vance Vehringer. The commission was advised that he has been paid the same rate for 5 years. James Tralle moved to approve the pay increase to $35 per hour. John Dietz seconded the motion. Motion carried 3-0. 5.3 Review and Consider MMUA Bond Pool Bryan Adams told the commission that Princeton and Rochester have joined the bond pool. James Tralle was impressed with the presentation and discussion at the last commission meeting. Page 3 Regular meeting of the Elk River Municipal Utilities Commission May 11, 2004 James Tralle moved to approve the resolution as presented. John Deitz moved against the resolution because of this being a new program he would like to wait until they have more experience. Jerry Takle asked if the City attorney had reviewed the documents. Bryan Adams indicated no but they would be provided the documents. James Tralle agrees but feels it would be a positive step. Jerry Takle moved to approve the Certificate of Resolution to participate. James Tralle seconded the motion. Motion carried 2-1. John Dietz opposed the motion. 5.4 Review Eastern Area Developments and Water Capacity Needs The commission was presented with a map of future developments with approximately 1800 new customers. Future water demands were discussed along with acquiring the land to build new wells. Bryan has been working with Michelle McPherson and Terry Maurer so they are aware of the future need for land to build the necessary wells in the new developments. 6.2 Review and Consider ASR Study Bryan explained the Aquifer storage and recovery process to the commission. With the increased demands on our water system and with Well #2 needing upgrading in the future, we could utilize this process and delay building a new treatment plant. Well # 8 would be used as the testing site. Phase 1 is estimated to cost$45,000 with a total cost in the$250,000 range. Bryan would like to start phase one of a multi phase process. John Dietz moved to approve this for the 2005 budget. James Tralle seconded the motion. Motion carried 3-0. 6.3 Review APPA 2002 Rate Comparisons The rate comparisons were reviewed with ERMU being competitive in the residential and commercial rates but much less competitive in the industrial demand rates. Other Business There was no other business. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be June 8, 2004. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 6:00 p.m. t espectfully s...mitt•. Nihk Judy McSpadden Recording Clerk