09-13-2016 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
September 13,2016
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;
Others Present: Cal Portner,City Administrator;Kristin Mroz,City Environmental
Technician;Peter Beck,Attorney
1.0 CALL MEETING TO ORDER
John Dietz called the September 13,2016 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 changes to the agenda.
Daryl Thompson moved to approve the September 13,2016 Utilities agenda. Al Nadeau
seconded the motion. Motion carried 3-0.
2.0 CONSENT AGENDA(Approved By One Motion)
John Dietz had a few questions and concerns on the electric portion of the financials. Staff
responded.
Al Nadeau moved to approve the Consent Agenda as follows:
2.1 August Check Register
2.2 August 9,2016 Regular Meeting Minutes
2.3 August 16,2016 Special Meeting Minutes
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2.4 August 22,2016 Closed Meeting Minutes
2.5 August 22,2016 Special Meeting Minutes
2.6 Financial Statements
2.7 2016-2017 Minnesota Municipal Utilities Association Safety Program Contract
2.8 Public Power Week Resolution
2.9 Customer Service Week Resolution
Daryl Thompson seconded the motion. Motion carried 3-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 OLD BUSINESS
4.1 Field Service Facility Expansion Update
Following the purchase of 1437 Main Street, staff met with Kodet Architectural Group to
discuss the future of the field service facility expansion. The meeting offered the
opportunity to review what had previously been discussed and come up with a game plan
on how we should proceed forward. It was determined that we would begin the process by
reviewing the plans and selecting an expansion footprint to help determine what site
improvements would need to be made prior to finalizing any building plans. Eric Volk
presented a preliminary drawing of the expansion footprint. Staff noted that the size of the
buildings were premature, and reiterated that the footprint was being use more or less to
show the preferred orientation of the buildings and to help determine what utilities would
need to be moved prior to construction. Eric stated that we already know that the sanitary
force main and substation will need to be moved. In addition,the wetlands will also need
to be relocated. Troy Adams added that one of the next steps will be dealing with road
right-of-ways and the multiple lots that are currently zoned residential.As staff will need to
work with the city to combine the lots and change the zoning, the earliest we'd be talking
about a design would be sometime next year. In the interim, soil boring tests will be
conducted. There was discussion on what the plans were for the home located at 1437 Main
Street.
Neighboring residents who could potentially be affected by the project, Chad Briggs,Ashle
Horton, and Sue Seeger were in attendance. The residents had some questions about the
expansion running north to south versus east to west. Staff responded. There were also
questions and discussion on the option of keeping the current driveway.
John Dietz wanted to know when we would have a more formal drawing available. Troy
stated that we'll want to get the soil borings back first as that will help dictate what our
footprint will be. He shared that we'll also need to evaluate what our current and future
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needs will be to help steer the design and the timing of the project. Once we have those
things into place,the architect should be able to give us some pricing based on the square
footage of the design.
5.0 NEW BUSINESS
5.1 Climate Smart Municipalities—Germany Tour 2016
Cal Portner and Kristin Mroz toured the state of North Rhine-Westphalia, Germany from
July 3-10, 2016 as part of the Climate Smart Municipalities (CSM)partnership. The CSM
is a 3 year grant from the Germany Transatlantic Program, also known as the Marshall
Plan. Five Minnesota cites(Elk River, Morris, Warren, Duluth, and Rochester)were
selected to partner with five North Rhine-Westphalia communities (Iserlohn, Saerbeck,
Arnsberg, Siegen, and Munster)to collaborate on climate and energy smart projects and
programs. The goal of the partnership is to help Minnesota cities achieve the state's"Next
Generation Energy Act" goal of reducing greenhouse gas emissions at least 30%below
2005 levels by 2025,while boosting the local economy.
Kristin Mroz provided a presentation on the Climate Smart Municipalities (CSM) Germany
Tour 2016. Kristin shared that a delegation of 27 members traveled to Germany where they
had the opportunity to meet with German agencies. The delegation also traveled
throughout the state, visiting their partner communities and touring a number of sites while
learning from community leaders. Kristen touched on each of the communities they had
visited and shared highlights from the tours taken. The presentation concluded with the Elk
River and Energy City goals for the partnership. The German delegates will be visiting Elk
River on the afternoon of October 11, 2016.
5.2 2017 Budget: 10 Year Capital Improvement Projects; Capital Projects and
Equipment Purchases; and Conservation Improvement Program
Troy Adams presented the preliminary 2017 Capital Improvement Projections, Capital
Projects and Equipment Purchases and the Conservation Improvement Plan. Notable items
for the Electric Department were Territory Acquisition costs,replacing pickup truck#31, a
new substation, and construction/renovation prep for the field services building. John Dietz
asked about the priority of the projects and requested that staff add numbers to identify
them. There was discussion.
Notable items for the Water Department were the sandblasting and painting of the filter for
well#4, construction/renovation prep for the field services facilities, and the replacement
of pickup trucks#25 and#26. Eric Volk shared that there may be an additional project due
to the Orono bridge replacement that the Minnesota Department of Transportation
(MnDOT)will be working on next summer. Eric explained that the water main located
within their right-of-way may need to be moved at our expense. Eric will be attending a
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meeting this week where he will find out whether it will need to be moved or not. John
Dietz had a question on the pickup trucks that were being replaced. Staff responded.
Tom Sagstetter presented the Conservation Improvement Program (CIP)Budget which
included detailed information about the cost of the specific programs as well as the historic
participation numbers. A notable item for 2017 is the addition of an electric vehicle
charging station for$58,000.. Tom shared that ERMU has applied for a grant from the
American Public Power Association (APPA)to help leverage our portion of the project. He
explained that because the grant would only cover the soft costs of the project and could
not be used towards the cost of the equipment, staff will be looking into other grant
opportunities for the equipment itself. There was discussion on potential sites for the
electric charging stations.
5.3 Performance Metrics Incentive Compensation—Evaluation of Criteria
Upon the award of the Performance Metrics Incentive Compensation (PMIC) in April of
this year,there was discussion on changing some of the metrics' measurements from those
we started with in 2012. As the metrics needs to be set and determined prior to the fiscal
year in which they are to be measured, staff recommended revisiting this topic before the
2017 budget was approved.
Theresa Slominski presented an overview of the 10 year history of the metrics used for the
score card and noted that based on the results of our 10 year history it's not a given that we
make our goal every time. Theresa shared that after soliciting feedback from staff and the
Commission on other items we may want to consider for measuring ourselves for the
performance metrics, she was able to compile a list of suggestions and the means in which
they could be measured. John Dietz led a discussion on the suggested options and the pros
and cons of each of them. The Commission was in favor of some of the suggestions and
directed staff to do some more research on the selected options and bring that information
back for further consideration.
5.4 Wage& Benefits Committee Update
Insurance Renewal- On August 22nd Theresa Slominski attended the City, County, Other
Government Agency (CCOGA)meeting for our medical insurance pool and received our
renewal increase of 19%. On September 12th the Wage and Benefits Committee met with
our insurance broker and our BlueCross BlueShield (BCBS) representative to discuss some
options on things we can do help mitigate the 19% increase. Based on the discussions,
staff had put together a spreadsheet outlining some different renewal options for group
medical insurance. Theresa explained the layout of the spreadsheet and went over the
details on our current rates, our renewal rates, and three alternative options for
consideration. In addition, she pointed out some of the differences between our current
Aware Gold and HSA plan and the alternative options that were presented which included:
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deductibles, office visit copays, coinsurance, out of pocket maximum, and prescription
drugs.
John Dietz shared his opinion on the 100%Aware Gold plan that is currently offered, and
suggested that it may be time to move over to a plan that offers 80%to 90%coverage to
help mitigate our costs. John was also in favor of keeping the benefits of the HSA plan as
close as possible to what it is currently offered if the goal is to incentivize employees to
migrate over to that plan. There was discussion. The Commission inquired as to how much
the company contributes annually towards the HSA. Staff responded that ERMU
contributes $650 for single, $1,985 for single +1, and $1,985 for family coverage. Troy
gave some background on the reasoning behind the company contribution to the HSA, and
indicated that the contribution still costs the company less than the increased premiums
they would be paying on the Aware Gold had the employees not switched over. There was
further discussion. Daryl Thompson requested that staff provide a cost comparison on
what the savings are on seeding the HSA compared to the larger premium payments
ERMU would be paying for the Aware Gold,to help determine if we want to keep the
same contribution amount or possibly increase it. Staff responded that they would bring
that information back to next month's Commission meeting. Theresa informed the
Commission that a decision on the insurance options would need to be made at the October
Commission meeting in order to meet the deadline and encouraged the Commissioners to
individually reach out to her before the next Commission meeting on any questions they
may have on the information that was presented.
2017 Cost of Living Adjustment-The Wage and Benefits Committee reported that there
have been some challenges with compiling information for the benchmarking as almost all
of the other utilities we typically poll are up for renewals on union contracts; so there is no
information available. Staff is exploring some other options for gathering the data needed
and will report back to the Commission once they have more information. John Dietz
shared what the city is proposing for their 2017 COLA.
6.0 OTHER BUSINESS
6.1 Staff Updates
Troy Adams shared that he received an email from Great River Energy(GRE)formally stating
that they want out of the Electric Purchase Power Agreement for Landfill Gas Plant in 2018.
In Mike O'Neill's staff report he had noted that as of August 22,2016,ERMU's security system
sales and installation department had been shut down and that WH Security would be handling
all of the service and sales calls until the October 1 transfer date.The Commission asked if there
had been any pushback from the affected customers. Staff responded.
Tom Sagstetter provided an update on the insurance claim with the League of Minnesota Cities
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for the failed engine at the Landfill Gas Plant. Tom stated that ERMU received a check from
insurance company for roughly$35,000.
6.2 Set Date for Next Meeting
The next regularly scheduled Commission meeting will be held on October 11,2016.
6.3 Adjourn Regular Meeting
Al Nadeau moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission at 5:31 p.m. Daryl Thompson seconded the motion. Motion carried 3-0.
Minutes prepared by Michelle Canterbury.
11116. t
Jo ► J.Die,
Chair,E Co' r• si'n
1
Tina Allard
City Clerk
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