01-10-2017 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
January 10,2017
Members Present: John Dietz,Chair;and Al Nadeau,Vice Chair
Members Absent: 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: Peter Beck,Attorney;Matt Westgaard,City Councilmember; Stewart Wilson;
and Mike Trunnell
1.0 CALL MEETING TO ORDER
John Dietz called the January 10,2017 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.
Al Nadeau moved to approve the January 10,2017 Utilities agenda. John Dietz seconded
the motion.Motion carried 2-0.
1.3 Recognition of Employee Achievement
Tom Sagstetter introduced Jolene Fenn-Jansen and announced that she received her Business
Generalist Certificate from Anoka-Ramsey Community College. Tom shared that Jolene is
utilizing the ERMU Educational Assistance Policy. The policy allows eligible employees to be
reimbursed costs after successfully completing course work that are related to their jobs. Jolene
shared a little bit about the program and the courses she has taken. Jolene expressed her
gratitude to the Commission for having an educational assistance policy that offers tuition
reimbursement.The Commission congratulated Jolene on her achievement.
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Regular meeting of the Elk River Municipal Utilities Commission
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2.0 CONSENT AGENDA(Approved By One Motion)
John Dietz had a few questions on the financials,staff responded.
Al Nadeau moved to approve the Consent Agenda as follows:
2.1 December Check Register
2.2 December 13,2016 Regular Meeting Minutes
2.3 Financial Statements
2.4 2017 Tariffs
2.5 Notice to Connexus Energy of Electric Service Territory Area 3&4 Transfer Date
2.6 ChargePoint Master Services and Subscription Agreement
John Dietz seconded the motion. Motion carried 2-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 OLD BUSINESS
4.1 Governance Manual
Based on Commissioner and staff input through surveys and discussion,our consultant John
Miner has developed drafts of the second two Governance Manual policies. Provided for
review were the following policies: G-1.4 Agenda Planning,and G-1.8 Commission
Committees.
For the G-1.4 Agenda Planning policy,there was discussion on the purpose and summary
section.Troy Adams suggested it be changed to reflect a two year"rolling"window for routine
governance functions. The Commission was open to that suggestion. John Dietz commented
that Section 1.1,relating to the election of Commission officers,would need to be changed from
the first meeting of the new fiscal year to March after the appointment of Commissioners by the
City Council. After discussion of Section 5,relating to Commission involvement in agenda
preparation,distribution and the timing of that process,Commission consensus was to make
some changes to that section of the draft policy to reflect the way we are currently operating.
The G-1.8 Commission Committees policy provided a high level overview of Commission
Committees and the way they operate. Troy shared that he would be going over this policy with
John Miner to fine tune it based on the Committees we currently have;the Wage and Benefits
Committee and the Finance and Reserves Committee.
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Regular meeting of the Elk River Municipal Utilities Commission
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5.0 NEW BUSINESS
5.1 2017 Conservation Improvement Programs and Water Sense Rebates
In 2017 Elk River Municipal Utilities (ERMU)will offer dozens of incentives to residential
and commercial customers. Rebates will be provided to customers purchasing efficient
electric and water equipment. Staff presented the updated ERMU Policy T.2 Conservation
Improvement Programs that had been revised to reflect the programs currently being
offered. Tom Sagstetter shared that in 2017 ERMU is required to spend a minimum of
$386,000 on electric conservation programs with a total equivalent energy savings goal of
over 3.8 million kWh. Tom stated that approximately 2.5 million kWh of that savings goal
should be achieved from the customer side of the meter,with the remaining 1.3 million
coming from the ERMU distribution side. Tom clarified that of the $386,000 that ERMU is
required to spend, $192,000 is funded by Great River Energy(GRE) and the remaining
amount by ERMU. As Minnesota Municipal Power Agency(MMPA) doesn't have a
similar program,there was discussion on the pros and cons and how this would impact us
once we migrate over to them as our wholesale power provider.
The most significant changes occurred in the water utility with the addition of rebates for
toilets, dishwashers, and water faucets. In 2017 the water conservation programs will have
a separate rebate form for water savings equipment. Staff presented the new WaterSense®
rebate application and stated that it would be included as an insert with the February
billing. Tom noted that with the elimination of the third step irrigation water conservation
program,the new water conservation program is geared towards benefiting more
customers, and will be much easier to administer. The water utility budgeted $5,000 for
water efficiency rebates.
On the electric side there were no new programs added. Tom noted that the Electric
Vehicle Charging Program (EV) had been changed from a load control program to a time
of use rate design program. Tom shared that as we move towards MMPA as our wholesale
power provider, we will be looking at transitioning some of our other load control
programs as well. Tom indicated that we will also be scaling back on the marketing of the
potentially affected programs. John Dietz had a question on the electric vehicle charging
rebate. Staff responded.
Al Nadeau made a motion to approve the revised ERMU Policy—T.2 Conservation
Improvement Programs. John Dietz seconded the motion. Motion carried 2-0.
5.2 2017 Vehicle Purchases and Retirements
Approved in the 2017 budget was the purchase of three F250 pickup trucks; two in the
Water Department and one in the Electric Department. Staff provided the mechanics
vehicle evaluation forms for the trucks that had been deemed ready for retirement;two of
the three units had accumulated enough points for replacement. Eric Volk shared that
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Regular meeting of the Elk River Municipal Utilities Commission
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although the third unit was two points short of the replacement level, staff was
recommending that unit be replaced as well due to extensive repair issues that would need
to be addressed. John Dietz inquired as to what we do with the old vehicles that are retired.
Staff shared that those vehicles go to auction; in 2016 the sale of vehicles generated
$29,450. There was discussion.
For 2017, Midway Ford was the vendor awarded the State Bid for Ford. Eric Volk
presented quotes from Midway Ford and Cornerstone Automotive. The quote from
Cornerstone Automotive came in at approximately $400 more per vehicle than Midway
Ford. Based on the small difference in price, staff recommended keeping the purchase of
the vehicles local with Cornerstone Automotive.
Al Nadeau made a motion to approve the purchase of the three F250 pickup trucks
from Cornerstone Automotive. John Dietz seconded the motion. Motion carried 2-0.
5.3 Highway 10 Water Main Project
The Minnesota Department of Transportation (MNDOT)has planned to rebuild Highway
10 from Waco Street to Proctor beginning in 2017. As they will be widening the highway
and replacing the bridge over the Elk River, it has been determined that ERMU will need to
relocate 900 feet of water main and reline 1,050 feet of water main in the project area. Eric
Volk shared that we will be incurring some costs in 2017 that were unbudgeted.As the
2017 budget has $80,000 set aside for facility maintenance, we will be utilizing some of
that money in 2017 to relocate the 900 feet of water main. As the relining project will occur
in 2018, staff will have the opportunity to budget for that next year.John Dietz asked if this
project would qualify for the use of city trunk funds. Staff responded that it would not.
There was discussion. Mark Fuchs shared that there is also electric wire that will need to be
moved for the project. Mark explained what needed to take place in 2017 and stated that
the unbudgeted cost would come from displacing a project. Eric informed the Commission
that we would be saving a large amount of money as we're doing a majority of the work
ourselves.
6.0 OTHER BUSINESS
6.1 Staff Updates
As previously communicated,ERMU and Connexus Energy representatives have identified an
area of dispute regarding Loss of Revenue(LOR)calculations outlined in the Electric Service
Territory Agreement. The dispute is in regards to the definition of"Municipal Development."
On January 4,2017,Connexus and ERMU leadership met per the agreement's alternative
dispute resolution procedure. Troy Adams provided an update on the discussions that took
place and shared that both parties were able to come to a mutually agreed upon verbal
agreement.Troy also provided an overview on the financial impact of the proposed changes
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relating to the LOR calculations. Connexus will be sending something in writing for ERMU
legal counsel review and Commission consideration and approval.
6.2 Set Date for Next Meeting
The next regularly scheduled Commission meeting will be held on February 14,2017.
6.3 Adjourn Regular Meeting
Al Nadeau moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission at 4:07 p.m. John Dietz seconded the motion. Motion carried 2-0.
Minutes prepared by Michelle Canterbury.
A' 4, 10
Jr' J. go ietz
Chair,ERMU Co
LLer-
Tina Allard
City Clerk
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Regular meeting of the Elk River Municipal Utilities Commission
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