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5.6. ERMUSR 09-08-2015 Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Al Nadeau—Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: September 8, 2015 5.6 SUBJECT: Expansion of the Elk River Municipal Utilities Board of Commissioners BACKGROUND: Shortly after the Village of Elk River purchased Elk River Power&Light,the council by the provision of Minnesota Statute 412.331 created through resolution the Water,Light,Power and Building Commission. This commission is now the Elk River Public Utilities Commission with responsibility for the municipal electric and water departments.The commission's membership is in accordance with Statue 412.341 "consisting of three members appointed by council." DISCUSSION: With the recent electric service territory agreement with Connexus Energy,ERMU will be growing by approximately 2,000 electric meters over the next five years. If you factor in normal growth,ERMU will likely experience a 20%growth over the next five years. When territory acquisition discussions began a few years ago,there was discussion on expanding the commission to provide better representation of the growing customer base. For statutory cities,the number of commissioner for a public utility commission is specified as three. To expand beyond three,it requires legislation for an exception for the requesting city to expand to more that the specified three. Of the Minnesota municipal utilities with separate commissions,Minnesota Municipal Utilities Association (MMUA)indicated that 50%have three commissioners. The rest now have five commissioners with the exception of one community that expanded to seven. If the ERMU commission where to expand,five members would be an appropriate size for ERMU. This type of legislation has typically been non-controversial. It has been recommended by MMUA that if a statutory city desires to expand their public utility membership,that a local legislator carry the bill. That request should be made by the city council. A revision to the city ordinance to accept the expansion should also be completed. The steps to expand the commission would be as follows: 1. Commission action to request council to request the expansion of the Elk River Public Utilities Commission from three members to five. • re- w E n E ® 1 1 Page 1 of 2 ATURE Reliable Public Power Provider P P O W E R E D T O S E R V E 171 2. Council action to request Representative Nick Zerwas of District 30A and/or Senator Mary Kiffmeyer of District 30 to carry a bill requesting the expansion in utilities commission membership. 3. Council action to revise city ordinance to accept the expansion in utilities commission membership contingent upon the legislation being passed. 4. Council to appoint additional utilities commissioners. MMUA has provided legislation language to serve as a template. Also,attached are the referenced statutes and city ordinance. ACTION REQUESTED: Staff requests Commission discussion and direction. ATTACHMENTS: • Proposed—Elk River Public Utilities Commission Expanded to Five Commissioners • Minnesota Statute 412.341 Commission;Membership,Organization • Minnesota Statute 645.021 Special Laws • City of Elk River Ordinance Chapter 2 Article V Division 5 Public Utilities Commission 'POWERED DI Page 2 of 2 NATURE Reliable Public Power Provider P O W E R ED T O S E R V E 172 Proposed—Elk River Public Utilities Commission Expanded to Five Commissioners Notwithstanding Minnesota Statutes,section 412.341,subdivision 1,the city of Elk River shall by ordinance increase the membership of the city's public utilities commission to five members.Terms for the additional members shall be staggered and made in accordance with the bylaws governing the utilities commission. EFFECTIVE DATE: LOCAL APPROVAL. This section is effective the day after the governing body of the city of Elk River and its chief clerical officer complete in timely fashion their compliance with Minnesota Statutes,section 645.021,subdivisions 2 and 3. 173 1 MINNESOTA STATUTES 2014 412.341 412.341 COMMISSION;MEMBERSHIP,ORGANIZATION. Subdivision 1.Membership.The commission shall consist of three members appointed by the council. No more than one member may be chosen from the council membership. Each member shall serve for a term of three years and until a successor is appointed and qualified except that of the members initially appointed in any city,one shall serve for a term of one year,one for a term of two years,and one for a term of three years.Residence shall not be a qualification for membership on the commission unless the council so provides.A vacancy shall be filled by the council for the unexpired term. Subd.2. Rules;officers,salary.The commission shall adopt rules for its own proceedings which shall provide among other things for at least one regular meeting by the commission each month.It shall annually choose a president from among its own members. It shall also appoint a secretary for an indefinite term. The secretary need not be a member of the commission and may be the city clerk. No member of the commission shall receive a salary except as fixed by the council. The secretary shall receive a salary fixed by the commission. History: 1949 c 119 s 44; 1951 c 378 s 12; 1973 c 123 art 2 s 1 subd 2; 1986 c 444 Copyright©2014 by the Revisor of Statutes,State of Minnesota.All Rights Reserved. 174 1 MINNESOTA STATUTES 2014 645.021 645.021 SPECIAL LAWS. Subdivision 1. Name required. A special law as defined in the Minnesota Constitution, article XII, section 2, shall name the local government unit to which it applies. If a special law applies to a group of local government units in a single county or in a number of contiguous counties,it shall be sufficient if the law names the county or counties where the affected units are situated. Subd. 2. Local approval required. A special law shall not be effective without approval of the local government unit or units affected, except as provided in section 645.023. Approval shall be by resolution adopted by a majority vote of all members of the governing body of the unit unless another method of approval is specified by the particular special law. Subd. 3.Filing required.The chief clerical officer of a local government unit shall,as soon as the unit has approved a special law, file with the secretary of state a certificate stating the essential facts necessary to valid approval, including a copy of the resolution of approval or, if submitted to the voters,the number of votes cast for and against approval at the election. The form of the certificate shall be prescribed by the attorney general and copies shall be furnished by the secretary of state.If a local government unit fails to file a certificate of approval before the first day of the next regular session of the legislature,the law is deemed to be disapproved by such unit unless otherwise provided in the special law. Subd.4.Previously enacted law.Laws 1959,chapter 368,does not apply to any special law heretofore enacted,whether or not it has been approved by the local government unit affected,but such unit shall file with the secretary of state a certificate of approval for such law as required in subdivision 3. History: 1959 c 368 s 1,2; 1979 c 176 s 1 Copyright©2014 by the Revisor of Statutes,State of Minnesota.All Rights Reserved. 175 CODE OF ORDINANCES OF THE CITY OF ELK RIVER,MINNESOTA Chapter 2-ADMINISTRATION ARTICLE V.-BOARDS AND COMMISSIONS DIVISION 5.-PUBLIC UTILITIES COMMISSION Sec.2-271.-Statutes accepted. The city hereby accepts the provisions of Minn.Stats.§§412.331-412.391. [Insert language to accept proposed statutory expansion of utilities commission to five members.] Sec.2-272.-Commission continued. There is hereby continued as heretofore established in the city a public utilities commission. (Code 1982,§210.00) State Law reference—Authority to establish public utilities commission,Minn.Stats.§ 412.331. Sec.2-273.-Membership. Each member of the public utilities commission shall be a resident of the city. Terms expire on the last day of February in the appropriate year. (Code 1982,§ 210.02) State Law reference—Membership of public utilities commission,Minn.Stats.§412.341. Sec.2-274.-Jurisdiction. The following public utilities shall be within the jurisdiction of the public utilities commission: (1) The city water system. (2) The city light and power system. (Code 1982,§210.06) State Law reference—Public utilities commission jurisdiction,Minn.Stats.§412.351. Sec.2-275.-Reports. The accounting officer of the public utilities commission shall make such monthly or annual statements of operation as the commission may require.A copy of each report shall be filed in the office of the city administrator. An annual financial report shall be made and a copy filed with the city administrator at the close of the calendar year and shall be included as part of the annual financial statement of the city administrator in conformance with law. The cost of publication of any other official statement required by law to be published shall be paid from public utility funds. (Code 1982,§210.12) Sec.2-276.-Violation of rules. It is unlawful for any person to violate any rules promulgated by the public utilities commission. State Law reference— Public utilities commission authorized to adopt utility service rules, Minn.Stats.§412.361,subd.4. Secs.2-277-2-295.-Reserved. 176