2.2. ERMUSR 02-09-2016 ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
January 12,2016
Members Present: John Dietz,Chair;Al Nadeau,Vice Chair;and Daryl Thompson,Trustee
ERMU Staff Present: Troy Adams,General Manager;
Theresa Slominski,Finance and Office Manager;
Mark Fuchs,Electric Superintendent;
Eric Volk,Water Superintendent;
Mike O'Neill,Technical Services Superintendent;
Tom Sagstetter,Conservation&Key Accounts Manager;
Michelle Canterbury,Executive Administrative Assistant;
Tom Geiser,Assistant Electric Superintendent
Jennie Nelson,Customer Service Manager
Others Present: Cal Portner,City Administrator;Peter Beck,Attorney
1.0 CALL MEETING TO ORDER
John Dietz called the January 12,2016 meeting to order at 3:30 p.m.
1.1 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.2 Consider Utilities Agenda
There were no additions or corrections to the agenda.
Daryl Thompson moved to approve the January 12,2016 Utilities agenda.Al Nadeau
seconded the motion.Motion carried 3-0.
1.3 Recognition of Employee Promotions
Mike O'Neill introduced Angela Hauge as the new GIS/Mapping Technician and Tony
Hubbard as an internal promotion to the Electrician/Electrical Technician.The Commission
congratulated the employees on their promotions.
2.0 CONSENT AGENDA(Approved By One Motion)
Daryl Thompson moved to approve the Consent Agenda as follows:
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2.1 December Check Register
2.2 December 8,2015 Previous Meeting Minutes
2.3 Financial Statements
2.4 2016 Tariffs
2.5 ERMU-GRE Capacity/Energy Termination Notice for the Diesel Power Plant
Al Nadeau seconded the motion. Motion carried 3-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 OLD BUSINESS
4.1 Security Deposit Policy
A number of items regarding the security deposit policy were discussed at the November and
December commission meetings. Per Commission direction,staff has identified several options
to strengthen procedures and minimize risk. Tom Sagstetter shared that based on discussions
and research of other local utilities in the area,staff has drafted a revised commercial service
agreement and a new commercial application form. The use of these two documents will allow
ERMU to better assess credit risk,establish more accurate security deposits,and collect the
security deposits upfront prior to providing service. Tom explained that the next step will be to
finalize the commercial service agreement and application,establish the risk assessment matrix
and revise the Security Deposit Policy. In order to move forward,staff is seeking Commission
approval of three items:all commercial customers(demand and non-demand)will be required to
pre-pay the applicable security deposit as outlined in the security deposit policy,to be subject to
a credit check as part of calculating the security deposit,and to pay a new customer application
fee of$20.00 per account at the time the security deposit is paid.
Tom elaborated on how the deposit would be based on the risk assessment matrix,requiring
commercial customers to pay a deposit equal to one to three months of their highest monthly
bill. John Dietz questioned the wording in the current policy that states"ERMU may,in its
discretion,waive or reduce the required deposit for commercial and industrial customers". His
concern was that if our intent is to always charge a minimum of one month's deposit that
including that clause in the new policy may cause problems if a customer felt that ERMU had
the power to waive their deposit and we didn't. Troy Adams added that we definitely want to
have the flexibility to waive the deposit,especially for large demand customers and government
agencies. Staff will look at re-wording it or setting certain parameters in the risk assessment
matrix to address that issue. There was further discussion on the proposed commercial credit
check and$20.00 new application fee.
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Daryl Thompson made a motion to approve requiring all commercial customers(demand
and non-demand)to pre-pay the applicable security deposit as outlined in the security
deposit policy,to be subject to a credit check as part of calculating the security deposit,
and to pay a new customer application fee of$20.00 per account at the time the security
deposit is paid. Al Nadeau seconded the motion. Motion carried 3-0.
5.0 NEW BUSINESS
5.1 NISC SmartHub Overview
Elk River Municipal Utilities went live on NISC's software on February 2, 2015. One of
the most exciting aspects of the software for staff and for customers has been SmartHub,
which is the online payment and account overview system. Jennie Nelson explained that
SmartHub offers many options for customers such as bill payment, ability to review their
payment and bill history, analyze usage data, and submit questions to staff. Jennie walked
through the system and showcased some of the highlights of the website for the
Commission. Jennie shared that SmartHub is ever evolving and NISC puts a great deal of
their time and money into making changes to the system to help ensure customer
satisfaction. She added that we have had very positive feedback from our customers about
the SmartHub feature and it has been a definite pro of switching over to NISC.
5.2 Employee Intranet
A few years ago when we gave our website a complete overhaul,the website designers
built in an employee intranet that we could utilize once we were ready.Now that the time
has come, staff is pleased to be able to share the features and benefits of our new intranet.
Michelle Canterbury explained that the intranet is a private area on our website that allows
employees to access the area with a user name and password. Staff plans to debut the
employee intranet within the next few weeks.As part of the kick-off Commissioners and
employees will receive an introductory email letting them know about this exciting new
feature and will also contain their user name,password and two helpful videos that explain
how to access and log into the site. Some of the items we'll have on our intranet will
include our reorganized policy book, employee links and critical information we want to
get out to our employees. Michelle demonstrated the features and the basics of how to sign
in and access the information. The Commission had a few questions. Staff responded.
6.0 OTHER BUSINESS
6.1 Staff Updates
Troy Adams commented that the video we were showing prior to the meeting was footage taken
from the lineworkers rodeo field build we assisted with last fall. The field will be used for the
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American Public Power Association(APPA)Lineworkers Rodeo being held April 2,2016 in
Shakopee,MN. Troy shared that we'd like to start promoting the event and if there is enough
community interest we may want to consider having a bus to help people get to and from the
event.We currently have three apprentice lineworkers that will compete individually and three
journeymen that will compete as a team.
Theresa Slominski shared that after further discussion with Senior Auditor,Andrew Berg,
regarding the accounting treatment for the Loss of Revenue(LOR)component of the territory
acquisition and our concern with the significant estimating that would be necessary for a
complete ten year liability to be recognized in year one,we agreed to recognize an asset each
year as the LOR is calculated and paid.We are still discussing whether to capitalize it in the year
of the payment or year of earning,and if the amortization term will be indefinite or the same as
the infrastructure component. Theresa pointed out that either way,we will not have to revise or
amend the 2016 budget for this item. There was further discussion. John Dietz asked about the
inventory inaccuracies for the security department that Theresa had commented on in her staff
report.Theresa shared that staff is still researching it to determine if it's an error data entry or in
actual inventory count.
Mark Fuchs shared that they conducted year-end inventory counts on December 29,2015,and
that the accuracy of the numbers looked extremely good. John Dietz inquired as to whether
we're still working with the city on winter tree trimming. Staff responded.
Mike O'Neill noted that we sent the formal termination notice to Great River Energy for the
ERMU Diesel Power Plant capacity/energy agreement.
Tom Sagstetter noted in his staff report that the LED holiday lighting contest was a huge
success. There were 28 participants and the involvement with Community Education was a
great addition. The Commission shared that it took approximately 4 V2 hours to go out and see
all the participants homes for the judging portion of the contest. There was discussion on fine-
tuning and improving the contest for next year. A few notable suggestions were:having some
type of sign/marker in the yard of the contest participants to help identify them,having a few
different groups of judges to help narrow down the top ten or twelve that the Commissioners
could go out and judge,and considering changing up some of the categories we use for the
judging criteria.
6.2 Set Date for Next Meeting
• The next regularly scheduled Commission meeting will be held on February 9,2016.
The Commission recessed the regular meeting at 4:18 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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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 4:33 p.m. Al Nadeau seconded the motion. Motion carried 3-0.
Minutes prepared by Michelle Canterbury.
John J.Dietz
Chair,ERMU Commission
Tina Allard
City Clerk
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