2.2 ERMUSR 05-09-2017 ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
April 11,2017
Members Present: Chair John Dietz;Vice Chair Daryl Thompson; Commissioners Al Nadeau
and Mary Stewart
Members Absent: Commissioner Matt Westgaard
ERMU Staff Present: Troy Adams, General Manager;
Theresa Slominski,Finance and Office Manager;
Mark Fuchs,Electric Superintendent;
Eric Volk,Water Superintendent;
Tom Sagstetter, Conservation&Key Accounts Manager;
Michelle Canterbury,Executive Administrative Assistant;
Melissa Karpinski,Accountant;
Jenny Biorn,Accountant
Others Present: Cal Portner, City Administrator; Peter Beck,Attorney;Andrew Berg,CPA
with Abdo,Eick&Meyers;Kaylee Benson; and Lora Benson
1.0 GOVERNANCE
1.1 Call Meeting to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.2 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.3 Commissioner Oath of Office
Michelle Canterbury administered the oath of office for Utilities Commissioner Al Nadeau.
1.4 Consider the Agenda
There were no additions or corrections to the agenda.
Moved by Commissioner Thompson and seconded by Commissioner Nadeau to approve
the April 11,2017,agenda. Motion carried 4-0.
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1.5 Recognition of ERMU's Tom Bovitz Memorial Scholarship Award Winner
Mr. Sagstetter provided some background on the scholarship program and introduced High
School Senior Kaylee Benson who had been chosen as the recipient of ERMU"Tom Bovitz
Memorial Scholarship." Ms. Benson shared what her future plans for college were. The
Commission congratulated her on the essay she wrote.
1.6 Resolution Recognizing 2017 Lineworkers Day
Chair Dietz read the resolution. Chair Dietz offered to write a letter on behalf of the
Commission to thank the ERMU lineworkers for all they do. The Commission was in
support of the idea.
Moved by Commissioner Nadeau and seconded by Commissioner Stewart to adopt
Resolution No. 17-3 recognizing lineworkers and designating April 18,2017 as
Lineworker Appreciation Day. Motion carried 4-0.
1.7 Resolution Recognizing 2017 Drinking Water Week
Chair Dietz read the resolution.
Moved by Commissioner Stewart and seconded by Commissioner Nadeau to adopt
Resolution No. 17-4 recognizing Drinking Water Week,May 7-13,2017. Motion carried
4-0.
2.0 CONSENT AGENDA(Approved By One Motion)
Commissioner Stewart identified a correction that needed to be made on page 2 of the March
13,2017 special meeting minutes. For agenda item 1.4,2017 Committee Appointments,the
second motion should state that Commissioner Thompson and Westgaard were appointed to the
Financial Reserves and Investment Committee and not Chair Dietz. Staff will amend the
minutes to reflect the correct appointment.
Moved by Commissioner Thompson and seconded by Commissioner Nadau to approve
the Consent Agenda as amended:
2.1 March Check Register
2.2 March 13,2017 Special Meeting Minutes
2.3 Resolution No. 17-2 Authorizing ERMU to Enter Into an Agency Agreement with
the State of Minnesota
2.4 Resolution No. 17-5 Allowing for Customer Contributions of Account Credits to
Community Aid of Elk River
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fund be designated toward the $500,000 buffer for PCAs, electric service territory transfer
costs, and future capital projects. The Commission had a few questions. Staff responded.
Moved by Commissioner Thompson and seconded by Commissioner Nadeau that
$500,000 of the unrestricted reserve balance of$6,564,901 for the Electric Utility fund
be designated for the PCA buffer, and the remaining amount be designated towards
future capital projects and electric service territory transfer costs. Motion carried 4-0.
Ms. Slominski presented the year-end water reserve balance and calculations. Staff
recommended that the unrestricted balance above the target level for the Water Utility fund
be designated for future capital projects.
Moved by Commissioner Nadeau and seconded by Commissioner Stewart that the
unrestricted reserve balance of$3,155,381 for the Water Utility fund be designated
for future capital projects. Motion carried 4-0.
4.3 2016 Utilities Performance Incentive Compensation Distribution
Mr. Adams presented the 2016 performance metrics and incentive compensation score card
on which the employees had successfully achieved all of the company performance metrics
targets, except for one (the CAIDI metric). Per the policy, qualifying employees would be
eligible for a 1.90% distribution. Staff reminded the Commission that in the fall of last
year, the Commission had re-evaluated the scorecard criteria used for measurement, and
had approved a revised performance metrics incentive compensation scorecard that would
go into effect for the 2017 measurement period. Ms. Slominski indicated that staff would
be presenting the new scorecard along with the first quarter results at the next Commission
meeting.
Moved by Commissioner Stewart and seconded by Commissioner Nadeau to award
the Performance Metrics Incentive Compensation distribution of 1.90% to qualifying
employees per the terms of the policy. Motion carried 4-0.
5.0 BUSINESS ACTION
5.1 Financial Report—February 2017
Ms. Slominski presented the February 2017 financial report. Chair Dietz asked if a majority
of the increase in administrative expenses was due to insurance. Ms. Slominski responded
that it was. She explained that the increase in medical was largely driven by the increased
participation in the HSA plan, which increased the employer HSA contribution that was
recognized in January.
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Moved by Commissioner Thompson and seconded by Commissioner Stewart to
receive the February 2017 Financial Report. Motion carried 4-0.
5.2 Waco #2 Electric Substation Materials Bid Award
Mr. Adams presented the bid tabulation and noted that we received two bids of which only
one was complete. There was also a third bid that was received late, so it was returned to
the bidder. When comparing the two bids, the one that was complete was consistent with
early budgetary estimates. Staff recommended awarding the bid for the Waco #2 electric
substation materials to Border States Electric for the amount $151,283.65. As there was
only one responsible bid,there was discussion on the option of rejecting the bids and going
through the formal bid process again. After discussion Commission consensus was to
award the bid to the lowest responsible bidder.
Moved by Commissioner Nadeau and seconded by Commissioner Stewart to award
the bid for the Waco #2 electric substation materials to Border States Electric for the
amount of$151,283.65. Motion carried 4-0.
5.3 Legal Counsel Retainer Increase
In May 2009 the Utilities Commission approved a legal counsel retainer of$1,000 per
month for Attorney Beck with Gray Plant Mooty. ERMU continues to contract legal
services with Attorney Beck with a$1,000 per month retainer through Beck Law Office.
Mr. Adams shared that the billable hours of legal service ERMU receives from Attorney
Beck under this retainer has always been greater than the amount billed. Based on inflation
since 2009, and ERMU's amount of usage, staff recommended increasing the monthly
retainer for legal services from$1,000 per month to $1,500 per month.
Attorney Beck shared that as part of his billing process, he tracks his actual hours worked
and prepares a statement that reflects the value of that time at the $155 per hour municipal
rate; this consistently ranges from $3,000 to $5,000 per month for ERMU. Attorney Beck
shared what the city's retainer was and explained that his billable hours with them run
approximately two times the monthly retainer rate. Taking all of this into consideration,
Attorney Beck felt it was fair to request the increase in retainer, and asked if the
Commission would consider making it effective retroactive to the first of the year.
Chair Dietz shared some of the benefits of having Attorney Beck on retainer and stated that
he felt it was a real advantage to have him present at our Commission meetings to offer his
legal opinion. Based on the amount of time we had been utilizing Attorney Beck, and the
value he offers to our organization, Chair Dietz expressed he was in favor of the $500
retainer increase and would even consider going higher than that. Attorney Beck pointed
out that in addition to his retainer there are sometimes additional legal fees when ERMU
utilizes the attorneys at Campbell Knutson or Gray Plant Mooty. After discussion,
Commission consensus was to increase the retainer to $1,750 per month effective the first
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of the year. Attorney Beck thanked the Commission.
Moved by Chair Dietz and seconded by Commissioner Thompson to approve a legal
counsel retainer for Beck Law Office of$1,750 per month to be effective January 1,
2017. Motion carried 4-0.
5.4 Wage and Benefits Committee Update
The Wage and Benefits Committee (W&BC) met on April 5 to receive an update on the
Technical Services Superintendent interviews,to evaluate current staffing level concerns,
and to review the pay equity compliance status. Mr. Adams provided an update of the
W&BC meeting as noted in his staff report.
The W&BC evaluated staffing levels for the electrical and technical services department.
After review, consensus of the W&BC was to recommend approval of the following to the
Commission: First, the W&BC recommended hiring one additional apprentice lineworker
to accommodate the growth in the electric system. Second, the W&BC recommended the
hiring of an additional apprentice lineworker as a proactive measure to prepare for
anticipated retirements. And third, the W&BC recommended increasing the Meter Reader
position from a part time position to a full time position.
There was discussion on ERMU's locating needs and how increasing the Meter Reader
position from part time to full time would help free up other labor resources to help out
temporarily. There was also discussion on the possibility of performing locating services
for the City of Elk River for Wastewater and Storm Water utilities. It was determined that
all of these factors may contribute to the timing of hiring a second locator which is
anticipated in 2018. This will be further evaluated for future discussion.
It was noted that the W&BC also discussed the vacant Key Accounts Specialist position
and the delay in hiring for the position. The W&BC plans to bring the Conservation and
Key Accounts Manager in to evaluate the position after a plan for the load management
programs have been approved by the Commission.
Moved by Commissioner Thompson and seconded by Commissioner Nadeau to
approve effective immediately the hiring of one apprentice lineworker because of
system growth, and a second apprentice lineworker to proactively address an
upcoming anticipated retirement, and change the part time Meter Reader to full time
status. Motion carried 4-0.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
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Mr.Adams announced that the Minnesota Municipal Utilities Association(MMUA) Summer
Conference is scheduled for August 21-23 and will be held at Madden's Resort in Brainerd,
MN. He highly recommended that all of the Commissioners attend the event.
Ms. Slominski had noted in her staff report that April 15 will mark the end of the cold weather
rule and staff anticipates high numbers for shutoffs once this comes to an end. There was
discussion.
Mr.Fuchs shared that the Lineworkers Rodeo is being held May 5-6 in San Antonio,TX.
ERMU will have one journeyman team that will be participating in the event. Mr.Fuchs and
Mr.Adams will also be in attendance and will also be staying on for the Engineering and
Operations Technical Conference which immediately follows the rodeo May 7-10.
Mr.Volk announced that he is running for Minnesota Section Chair for the American Water
Works Association(AWWA). The election results will be announced in September. The
Commission wished him luck.
Mr. Sagstetter had nothing additional to add. Chair Dietz wanted to know when staff anticipated
having the electric vehicle charging stations up and running. Mr. Sagstetter stated that work will
begin first on the level two charging station that will be located in the HRA parking lot
downtown.He shared that the other charging station,to be located at Ralphie's,cannot move
forward until the final location of the buildings and parking lots have been determined. There
was discussion.
6.2 Future Planning
There was no future planning.
6.3 Other Business
There was no other business.
7.0 ADJORN REGULAR MEETING
There being no further business,Chair Dietz adjourned the regular meeting of the Elk
River Municipal Utilities Commission at 4:58 p.m.
Minutes prepared by Michelle Canterbury.
John J. Dietz,ERMU Commission Chair
Tina Allard, City Clerk
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